court

Apache is functioning normally

Apache is functioning normally

Between 2000 and 2007, 5,306 people with criminal backgrounds became loan originators in Florida, according to an investigation conducted by the Miami Herald.

Of that group, 2,201 had committed a financial crime such as mortgage fraud, money laundering, or worse, but still managed to enter the business with little or no opposition.

This could be attributed to the fact that loan originators aren’t subject to the same licensing requirements as mortgage brokers, and as such, are significantly less regulated.

The Herald found that more than half of the 120,563 “mortgage professionals” registered in Florida joined the troubled industry this decade without being state-licensed.

But even mortgage brokers managed to find work in the industry as loan originators after having their licenses stripped or denied, with some knowingly circumventing the law.

One former broker who had previously committed $4 million in mortgage fraud in the state of Maryland wittingly applied as a loan originator, knowing this would be his only way back in.

Interestingly, that broker is now in charge of compliance at the firm he works for, though he rationalizes that he’s the best man for the job because of his checkered past.

The investigation, which utilized court documents, state industry reports, police reports, and internal e-mails, found that one in five loan originators at 30 mortgage lenders that employed 50 or more workers had a criminal background.

Good to know…

Source: thetruthaboutmortgage.com

Apache is functioning normally

Apache is functioning normally

The short answer is, yes, estate planning can be a smart move for everyone.

Though it’s not much fun to think about what will happen to your loved ones after you are gone, doing some estate planning early on, and readjusting it as needed throughout your lifetime, can help you prepare for the future and protect the people you care about.

One of the biggest reasons why is that without an estate plan, any assets you have may not go to the people you would have wanted to have them. And, if you have children, you won’t have a say in who becomes their guardian. Not having an estate plan can also create a lot of legal and administrative headaches for your family members and friends.

Contrary to what many people assume, you don’t have to be old, rich, or have children to benefit from making a financial plan for after you are gone.

Read on to learn what estate planning is all about and what you can do to get started.

What Is an Estate Plan?

Estate planning is deciding in advance and in writing who will get your assets and money after your death or in the event that you become incapacitated.

It can be as simple as designating certain people as your beneficiaries on your financial accounts. Estate planning also typically includes creating a will. It can also include setting up trusts and creating a living will that can be used should you ever become incapacitated.

Your “estate” is simply everything you own — money and assets, including your home and your car — at the time of your death.

Your debts are also part of your estate. Anything you owe on credit cards and loans may have to be paid off first by your estate before any further money or assets are distributed to your heirs.

Estate planning is not entirely about money, though. It may also leave instructions for how your incapacitation or death may be handled. For instance, you may not want to be kept on a life-support system if you were in a coma. You may want to be cremated instead of buried. These instructions can be included in your estate planning.

An estate plan may also include choosing a guardian for your children and any specific wishes regarding how you want them to be raised.
💡 Quick Tip: We all know it’s good to have a will in place, but who has the time? These days, you can create a complete and customized estate plan online in as little as 15 minutes.

The Importance of an Estate Plan

An estate plan can be beneficial no matter what your age, income, assets, or family status. Below are some key reasons why you may want to consider estate planning.

You Decide Where Your Assets Will Go

If you don’t have beneficiaries named in an estate plan, the courts will determine who gets your assets. That might be your closest kin (possibly someone you wouldn’t want to have your inheritance), and if you have none, the state may take those assets.

Likely you have someone who you would prefer to leave assets to, and if not, you can choose a charity.

You Have Children

If you have children, it’s important for you to consider how you want them cared for if you and your spouse were to pass away, and who you would want to be their guardians.

Your estate plan can even outline how you hope to pass on aspects of your life such as religion, education, and other values. You can also set up a trust so that your children receive an inheritance once they are 18.

It Can Help Avoid Legal Headaches

If you have beneficiaries you want to leave your assets to, having an estate plan and/or will can minimize the legal headache your loved ones have to deal with.

Without any kind of estate plan, a probate court may have to determine how assets are divided, and this can take months or years, delaying those assets making it to the people you want to have them.

It Can Help Prevent Family Conflict

Your family members may all get along well, but it’s a good idea to write a will so that things remain harmonious.

Regardless of the size of your estate, some careful estate planning can help prevent your family members from arguing over who gets what, whether it’s a small tiff or a full-on lawsuit.

It Can Ease the Financial Burden of Final Costs

Many people don’t consider planning their own funerals, and that may leave an emotional and financial burden on their loved ones.

A funeral can cost, on average, around $7,900, and a cremation about $6,900. Consider whether your loved ones would be in a financial situation to be able to afford to cover that expense, plus any others involved with your final arrangements.

Taking these final costs into consideration can be a part of your estate plan. You might decide to set aside funds to cover your funeral expenses.

You can do this with a “payable on death” account, which can be set up through your bank and allows the designated beneficiaries to receive the money in the account when you pass away.

Or, you might elect to purchase a prepaid funeral plan, which sends money directly to the funeral home to cover a casket, floral arrangements, service, and other aspects of your funeral. You may want to keep in mind, however, that prepaying for a funeral can lead to a loss of money if the funeral home goes out of business.

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What’s Included In an Estate Plan

While your estate plan will be unique to your own situation, there are a few things you might consider including.

A Will

Your will is the actual document that outlines who your beneficiaries are and what they will receive upon your passing. It may also identify a guardian if you have young children.

This is also where you can identify the executor, who will carry out the terms of your will.

Recommended: What Happens If You Die Without a Will?

Life Insurance Policy

Having this policy information with the rest of your estate plan makes it easy for your family to file a claim with your insurance company upon your death.

A Living Will

Death is not the only situation in which you may be unable to make a decision. You may be alive yet incapacitated, and in this scenario it can be difficult for your loved ones to know what you want them to do.

Writing a living will can be highly valuable because it lays out how you want to be treated during your end-of-life care, including specific treatments to take or refrain from taking.

A living will is often combined with a durable power of attorney, a legal document that can allow a surrogate to make decisions on behalf of the incapacitated individual.

Letter of Intent

This letter is directed to your executor, and provides instructions for carrying out your wishes in regards to your will, and possibly also funeral arrangements.

A Trust

If you have a sizable inheritance for your beneficiaries and don’t want them to have access to all the funds all at once, you can establish a trust with rules about how and when they receive the money.

For example, you could stipulate that your children receive a fixed allowance each month until they graduate college or get married, or that they use the money for college.
💡 Quick Tip: A trust is a customized estate planning tool that can be helpful for your heirs in addition to a will.

Key Account Information

You might also consider providing account numbers and passwords for bank accounts, investment accounts, and other important accounts that your family will need access to. This can make life much simpler for your loved ones.

Recommended: What Is the Difference Between Will and Estate Planning?

The Takeaway

Whether you have children and want to ensure they’re taken care of, or you’re single and would like your assets to go to certain people or a charity you care about, it’s wise to have a basic estate plan.

Having a financial plan in place in the event that you pass away or become incapacitated can protect surviving family members from unnecessary financial, legal, and emotional stress.

When you want to make things easier on your loved ones in the future, SoFi can help. We partnered with Trust & Will, the leading online estate planning platform, to give our members 15% off their trust, will, or guardianship. The forms are fast, secure, and easy to use.

Create a complete and customized estate plan in as little as 15 minutes.


Coverage and pricing is subject to eligibility and underwriting criteria.

Ladder Insurance Services, LLC (CA license # OK22568; AR license # 3000140372) distributes term life insurance products issued by multiple insurers- for further details see ladderlife.com. All insurance products are governed by the terms set forth in the applicable insurance policy. Each insurer has financial responsibility for its own products.

Ladder, SoFi and SoFi Agency are separate, independent entities and are not responsible for the financial condition, business, or legal obligations of the other, Social Finance. Inc. (SoFi) and Social Finance Life Insurance Agency, LLC (SoFi Agency) do not issue, underwrite insurance or pay claims under Ladder Life™ policies. SoFi is compensated by Ladder for each issued term life policy.

SoFi Agency and its affiliates do not guarantee the services of any insurance company.

All services from Ladder Insurance Services, LLC are their own. Once you reach Ladder, SoFi is not involved and has no control over the products or services involved. The Ladder service is limited to documents and does not provide legal advice. Individual circumstances are unique and using documents provided is not a substitute for obtaining legal advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Source: sofi.com

Apache is functioning normally

Apache is functioning normally

The Supreme Court is taking on a case that questions the constitutionality of how the Consumer Financial Protection Bureau (CFPB) is funded. Oral arguments are set for Oct. 3.

The CFPB is a consumer watchdog agency funded by the Federal Reserve System, not Congress. This funding mechanism was established by a Democrat-led Congress and is meant to safeguard the agency’s funding against changes in the political climate.

The case against the CFPB was brought by the Community Financial Services Association of America and the Consumer Service Alliance of Texas, which both represent the payday loan industry. The suit alleges that the CFPB’s funding mechanism is unconstitutional under the Appropriations Clause of the Constitution. That clause says “no money shall be drawn from the Treasury, but in consequence of appropriations made by law.”

Last year, the U.S. Court of Appeals Fifth Circuit in New Orleans took on the case and in October 2022, the judges in that panel unanimously ruled against the CFPB.

If the Supreme Court upholds the Fifth Circuit’s ruling it could bring into question all previous enforcement actions the agency has taken since its inception. Such a decision could also stymie the agency’s ability to carry out its mission in the future.

What is the CFPB?

The CFPB was formed in the wake of the 2008 financial crisis, under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Its mission is to implement and enforce federal consumer financial law. It does so by holding accountable the companies that market these types of products such as payday loans, credit cards, student loans and mortgages. It additionally collects consumer complaints.

The CFPB can also take legal action against companies. From 2012 to 2022, the agency has filed 322 public enforcement actions, resulting in more than $16 billion in relief to consumers and $3.7 billion in fines.

How much funding does the CFPB receive?

In fiscal year 2023, the CFPB has $3.57 billion in budgetary resources, which represents roughly 0.006% of the $6.4 trillion fiscal year 2023 U.S. federal budget. But the agency planned to spend much less — about $723.3 million, which represents about 20% of its overall resources.

What is the case against the CFPB?

The question of the CFPB’s funding wasn’t the primary focus of the original lawsuit — its 2017 payday lending rule was. That rule prevents short-term lenders from lending to consumers without reasonably determining if they can repay the debt. It also prevents lenders from withdrawing payments directly from consumers’ bank accounts when payments have been missed without permission of the consumer.

The suit originated in April 2018, was eventually struck down and then appealed in the Fifth Circuit Court. There, the panel of judges didn’t side with the two plaintiffs on their claims against the 2017 payday lending rule, but they did agree with the plaintiffs’ claim against the CFPB’s funding mechanism.

In the Fifth Circuit Court’s decision, it said the “Bureau’s unique, double-insulated funding mechanism” violated the constitution’s separation of powers.

Soon after the Fifth Circuit Court’s decision was handed down, the Biden Administration appealed to the Supreme Court. On Feb. 27, the Court agreed to hear the case in its 2023-2024 session.

What happens next?

The Supreme Court will hear oral arguments on Oct. 3 for Consumer Financial Protection Bureau v. Community Financial Services Association of America. However, a decision is not expected until late spring 2024.

Source: nerdwallet.com

Apache is functioning normally

Apache is functioning normally

Identity thieves are almost always opportunistic—but the crimes they commit feel very personal. Unauthorized credit card charges, bogus loan applications, missing money, and other financial violations make fraud a major nightmare. To keep fraud in check, you need to know how to check your credit report for identity theft, and how to deal with problems when they arise.

In this post, we’ll talk about the warning signs of identity theft—and then we’ll show you how to stamp out fraud before it starts.

Warning Signs of Identity Theft

How Do I Check My Credit for Identity Theft?

To avoid falling victim to identity theft, examine your credit report regularly. You can access a free copy of your credit report from all three bureaus—Equifax, Experian, and TransUnion—once a year. (Through April 2022, you can get free weekly copies of your reports.) You can also use a tool like Credit.com’s Credit Report Card or ExtraCredit to monitor your credit.

When you download your credit report with ExtraCredit, you’ll see a list of positive accounts, late accounts, collections, public records, inquiries and account balances. Your credit report contains a lot of information about you and about your financial habits, and if that information changes unexpectedly, it can indicate identity theft. Here are five of the biggest fraud warning signs to watch out for.

Warning Sign 1: Incorrect Personal Information

Sometimes, incorrect personal information is the result of an innocent mistake. Other times, it means something sinister is going on. If you see your name misspelled, a wrong phone number or address, or an incorrect Social Security number on your credit report, investigate immediately.

  • I just watched a documentary on the dark web, and I will never feel safe using my credit card again!

  • Luckily I don’t have to worry about that. I have ExtraCredit, so I get $1,000,000 ID protection and dark web scans.

  • I need that peace of mind in my life. What else do you get with ExtraCredit?

  • It’s basically everything my credit needs. I get 28 FICO® scores, rent and utility reporting, cash rewards and even a discount to one of the leaders in credit repair.

  • It’s settled; I’m getting ExtraCredit tonight. Totally unrelated, but any suggestions for my new fear of sharks? I watched that documentary too.

  • …we live in Oklahoma.

Warning Sign 2: Lender Inquiries You Don’t Recognize

Credit bureaus keep the details of companies who ask for information about you on record for at least two years. Promotional inquiries and account review inquiries  are nothing to worry about, because they’re preapproved credit offer inquiries or inquiries by companies you already do business with. 

Hard enquiries from companies you don’t recognize are a different matter. Sometimes, fraudsters make a lot of credit card and personal loan applications in a short period of time, so if you see a recent list of unknown inquiries, someone might be trying to steal your identity.

Tip: Sometimes, the name of a financial institution doesn’t precisely match the name of the company checking your credit. Car dealerships, for example, sometimes run a series of credit checks via different finance companies—so it’s worth double checking before filing a fraud complaint.

Warning Sign 3: Accounts You Never Opened

Only your own accounts—including accounts that you’ve cosigned and for which you’re an authorized user—should appear on your credit report. If you find an unknown account on your credit report, one of two things has happened:

  • Your credit information has been commingled with someone else’s information by mistake
  • Your credit has been compromised by a fraudster

If you find an unknown account on your credit report, contact the relevant lender right away and tell them what’s going on. 

Warning Sign 4: You Credit Utilization Goes Up

If you suddenly owe more than before and you haven’t changed your spending habits, someone else might be splurging on your behalf. Check your credit card statement very carefully and flag any suspicious transactions straight away. Most credit card companies have a maximum 120-day limit for chargebacks, so it’s important to review purchases regularly.

Warning Sign 5: Your Score Goes Up or Down Unexpectedly

Credit scores change over time. When negative information falls off your credit report after a certain period of time, your score increases. On the other hand, if you apply for too many loans or credit cards in a short space of time, your credit score could take a hit. If your credit score changes dramatically—especially if it’s for the worse—dig deeper.

Warning Sign 6: Public Records You Don’t Recognize

Negative public records can substantially impact your creditworthiness. Bankruptcies, for instance, often remain on record for up to a decade. If you see public records you don’t recognize, alert the issuing agency without delay. 

Tip: Liens and civil court judgments used to appear on credit reports, but credit bureaus no longer collect information about those types of public records. Bankruptcies are now the only public records included on credit reports.

Can Someone Steal Your Identity with Your Credit Report?

Your credit report contains a lot of personal information, so it’s a goldmine for identity thieves. With a copy of your report in hand, a potential fraudster might be able to see:

  • Full name
  • Birth date
  • Social Security number
  • Current and past home addresses
  • Phone number
  • Accounts held in your name
  • Payment records
  • Public records, including bankruptcies
  • Many other valuable personal and financial details

Credit report content sometimes varies according to the credit bureau. 

If thieves need more information after accessing your credit report, they often choose to misrepresent themselves to get it. Phishing and smishing scams are when criminals pretend to be legitimate financial institutions—or government agencies like the IRS—to get personal information from victims via email or text. 

What Is the Safest Way to Check My Credit Report?

You can check your credit report quickly and easily with Credit.com’s ExtraCredit monitoring service. ExtraCredit includes five helpful tools, which help you monitor, build, earn, protect, and restore your credit profile. Two tools in particular can help you avoid or combat identity fraud: Track It and Guard It.

Track It

With ExtraCredit’s Track It tool, you get access to all three credit bureau reports. You can also monitor 28 FICO® scores—the real scores lenders see when they consider auto loan, credit card, and mortgage applications. Track It also includes a helpful credit monitoring tool, which gets updated every month. If something suspicious happens, you’ll notice right away.

Guard It

Many hackers sell consumer information on the dark web. Nefarious individuals use software, specific net configurations, or special authorizations to access the dark web. Thankfully, ExtraCredit’s Guard It tool actively monitors the dark web for consumer information and sends out security alerts when data breaches happen. You also get a $1 million ID insurance policy when you sign up with ExtraCredit.

Get Identity Theft Protection

Identity theft is a big problem in the United States. There were 650,572 cases of identity theft in America in 2019—and over 270,000 of those cases involved credit card fraud. If you see an unknown address or notice an unknown credit card on your credit report, flag it up right away. Tools like ExtraCredit from Credit.com make it easier to monitor your report on a monthly basis, so you can rest more easily.

Source: credit.com

Apache is functioning normally

Apache is functioning normally

After you’ve debated the pros and cons of living with someone and decided to have a roommate, the next challenge is figuring out how to find one. If you don’t already have a potential roommate in mind, you’ll need to start looking for one, which is its own challenge. Here are tips on how to find a roommate who will be compatible with your lifestyle.

Ask around

You can ask your family, friends and other acquaintances if they know anyone looking for a place to live. At the very least, you can let others know you’re seeking a roommate, so they can pass along the word to their friends and family. There’s a good chance that your contacts know someone who needs a place to live.

Furthermore, you’ll have the benefit of a reference you know already. You can ask your friends and family about the potential roommates and what they think of them. If a friend says their old roommate is looking to move, you can get great insights on if the potential roommate is clean, easy to live with, etc., from your friend, rath

er than relying on unknown references provided to you by that potential roommate.

Leverage social media

This can be a farther-reaching method of asking friends and family if they know anyone looking for a place to live. You can make a post with details, such as the area you’ll be living in, how much rent will be and how many other people will be living in the apartment. Make sure that your post is shareable, then ask everyone to share your post to get the word out!

You can also do some searching on socials to see if others from your city are posting about looking for an apartment. Reach out to those individuals and let them know what your apartment and the living situation would offer!

Some social media platforms like Facebook have groups specifically for housing in certain cities or areas. You can post in these groups that you’re looking for a roommate and it will be seen by plenty of others.

Place ads and listings

There’s no shame in using platforms like Craigslist and Facebook Marketplace to find a roommate. It’s easy and usually free to create a listing and it’s searchable by location, so those who are actively seeking to live in your area will quickly find your listing. Many local or state news networks will have a place for classified listings and rentals, so check to see if your city has one where you can post your apartment.

Try an app

Using apps is one of the best ways to find a roommate. There are plenty to choose from, but some of the most popular are Cirtu, Roomster, Roomi and SpareRoom. Such apps often allow for a more personalized search where you can specify what qualities you want in a roommate (quiet and keeps to themselves, extroverted and likes to socialize, clean, etc.). They also often require background checks or multi-step verification for users, so it can be safer for you to use.

You’ve found a roommate, now what?

As much as you want to find a roommate, your personal safety, credit history and even your reputation matter. So, make sure you research every potential roommate thoroughly.

1. Review references

Ask applicants for references from employers and previous landlords. Even notes from friends, clergy, professors and former roommates can help you get a sense of their character and habits.

Search each potential roommate’s social media pages to see if they’re respectful in their interactions with others and if they show good judgment in what they post publicly. If you see evidence of illegal activity, angry messages from friends or hostile, hateful, racist or sexist posts from your potential roommate, cross them off the list.

2. Check their criminal background

Search each applicant’s name and look for arrest records. Some states also have circuit court access websites available for your reference. People with common names are sometimes mixed up, so make sure you’re researching the right individual by cross-referencing details like photos and location.

If you find something questionable, you can reach out to the police department that made an arrest. They can offer clarification while still preserving privacy.

3. Do a financial check

Of all the questions to ask potential roommates, financial questions are among the most important. You’ll be paying bills with this person, so their bad credit and financial habits could affect you.

You can request a credit check from a potential roommate to make sure they have a solid payment history and ask about their job. Someone with a steady full-time job is likely more stable than someone who works sporadically or changes jobs frequently. You can ask for pay stubs as proof if you’re concerned.

Keep in mind that a potential roommate might have alternative sources of income, like alimony, savings, stipends and investments. Or, if they’re a student, they can typically get extra help via student loans or grants.

Other questions to ask potential roommates

Once you’ve narrowed down your list of candidates, it’s time to go a little deeper by discussing your personalities and habits to find the best fit.

Consider creating a rough outline of a roommate agreement and using it as a conversational guide. If you hit it off, you and your future roommate can edit it together before they move in.

1. Additional financial questions

You don’t have to be best friends to be successful roommates. But you do have to cooperate and be good financial partners.

Ask your roommate what they can spend on rent and utilities and how much they can contribute to the security deposit. Discuss how and when you’ll pay bills and what will happen if someone comes up short.

2. Chores and responsibilities

The bills aren’t the only thing you’ll be dividing — roommates need to split the chores, as well. Be honest about how often you plan to clean, which chores you’d like to handle and if you’re tidy or messy. If you’re on opposite sides of the spectrum, you could face an uphill battle.

Shopping, deep cleaning and other household management tasks like corresponding with your landlord also fall under this category. Hash out how you’ll allocate these tasks and figure out a system that will work for both of you.

3. Personalities and habits

An introvert and an extrovert can live together quite happily, as long as they establish ground rules. Figure out a communication style that works for both of you.

Little disagreements can cause big drama, so chat about seemingly insignificant things like how warm you like the apartment and what you consider a “normal” volume level before you move in. If your views on habits like drugs, alcohol and smoking don’t line up, that’s probably a deal-breaker.

4. Schedules

Get an idea of how often your potential roommate will be at home. A traveling sales rep has a very different schedule than someone who works and socializes on a laptop in their bedroom.

It’s also smart to talk about how they plan to use your joint living spaces. If they cook three-course dinners every evening, like to throw parties or plan movie marathons every weekend, find ways to make sure their activities don’t interfere with your at-home workout sessions or meditation time.

5. Personal relationships

How do you feel about friends and family members coming over or spending the night? What happens if you both want company at the same time? If they’re dating someone, discuss how often their partner will be in the apartment and expectations around what privacy will look like.

Pets are like family, so make sure you know the details about your potential roommate’s pets. Discuss how they’ll share the space with yours and brainstorm how you might split pet-related chores. If one of you is allergic to animals — or if pets aren’t allowed in the building — move on.

The best way to find a roommate

Once you’ve done your homework, it’s time to make your future roommate an offer. Eliminate anyone who gave you a bad feeling or people with whom you just didn’t click. Basic respect and good communication are the building blocks of a solid roommate partnership.

Figuring out how to find a roommate can be challenging. But it doesn’t have to be complicated. Ask smart questions, leverage your personal networks and use tools available to help you find someone with similar goals who will be a good fit.

Source: rent.com

Apache is functioning normally

Apache is functioning normally

Do you have bill collectors contacting you about unpaid debt? If so, it’s important to understand your rights. Even if you have debt that’s still unpaid, your creditors only have a certain amount of time to take legal action against you.

So, before you think about talking to a bill collector or agreeing to a new payment arrangement, it’s important to know what the statutes of limitations are in your state. It’s these statutes that can help you determine your next step.

Keep reading to learn more about what statutes of limitations on debt collection are and how they work.

In This Piece

What Is a Statute of Limitations on Collections?

The statute of limitations on collections is the amount of time a creditor or debt collector has to file a lawsuit to collect unpaid debt. These statutes vary by state, type of debt and terms of the contract, if there is one.

Occasionally, creditors and debt collectors may try to file a lawsuit after the statute of limitations has ended. So, it’s your responsibility to provide the courts with proof that it’s past the statute of limitations. So, be sure to save any payments made or communications you had with any creditor or collections agency.

When the clock for the statute of limitations on debt begins varies from state to state. It either starts when you miss your first payment or when you have the last communication with the creditor or debt collector.

Can a Debt Collector Restart the Clock on My Old Debt?

There’s a chance that communication with a debt collector could restart the clock on the statute of limitations. For example, if you agree to any new payment arrangement or make a payment, this act could restart the clock.

Effect of Statute of Limitations on Your Credit Report

If you’re looking for ways to repair your credit, the statute of limitations has no impact. It’s important to understand that the statute of limitations doesn’t affect how long a debt can remain on your credit report. These are two different policies.

In most cases, a debt can remain on your credit report for up to seven years. This is the case even if the statute of limitations has ended. This means that while creditors may no longer be able to take you to court, your debt could still impact your credit score.

What Is the Statute of Limitations on Debt Collections by State?

Statutes of limitations on collections vary by state and by type of credit account. There are four basic types of debt:

  • Written debt. Written debt occurs when there’s a signed contract that details the terms of the loan. This doesn’t have to be a formal contract. It can simply be written on a piece of paper.
  • Oral debt. Oral debt is a verbal agreement made between two people that details the terms of the debt.
  • Promissory notes. Promissory notes are written agreements where you agree to make a set number of payments over a set number of years. While it is also a form of written debt, promissory notes normally include a promise to repay as well as a repayment schedule. This makes them more legally binding than a written debt or IOU. Common types of promissory notes include home mortgages and student loans.
  • Open-ended credit. Open-ended credit includes any type of revolving credit account, such as credit cards.

Below is a look at the statute of limitations on collection by state, broken down by debt type.

State Written Contract Oral Contract Promissory Open-Ended
Alabama 6 6 6 3
Alaska 3 3 3 3
Arizona 6 3 6 6
Arkansas 5 3 5 5
California 4 2 4 4
Colorado 6 6 6 6
Connecticut 6 3 6 6
Delaware 3 3 3 4
Florida 5 4 5 5
Georgia 6 4 6 6
Hawaii 6 6 6 6
Idaho 5 4 5 4
Illinois 10 5 10 5
Indiana 10 5 10 6
Iowa 10 5 10 6
Kansas 5 3 5 3
Kentucky 10 5 15 10
Louisiana 10 10 10 3
Maine 6 6 20 6
Maryland 3 3 6 3
Massachusetts 6 6 6 6
Michigan 6 6 6 6
Minnesota 6 6 6 6
Mississippi 3 3 3 3
Missouri 10 5 10 5
Montana 8 5 8 5
Nebraska 5 4 5 4
Nevada 6 4 3 4
New Hampshire 3 3 6 3
New Jersey 6 6 6 6
New Mexico 6 4 6 4
New York 6 6 6 6
North Carolina 3 3 5 3
North Dakota 6 6 6 6
Ohio 6 6 6 6
Oklahoma 5 3 6 3
Oregon 6 6 6 6
Pennsylvania 4 4 4 4
Rhode Island 10 10 10 10
South Carolina 3 3 3 3
South Dakota 6 6 6 6
Tennessee 6 6 6 6
Texas 4 4 4 4
Utah 6 4 6 4
Vermont 6 6 6 6
Virginia 5 3 6 3
Washington 6 3 6 6
West Virginia 10 5 6 5
Wisconsin 6 6 10 6
Wyoming 10 8 10 8

Source: The Balance

Just because the statute of limitations has ended doesn’t mean you don’t still owe the debt. It only means that creditors and debt collectors can no longer sue you in court to collect the money due. Technically, you still owe the debt. So, debt collectors and creditors can still try to collect this money.

This means you still might receive calls from debt collectors. It’s important to understand that if you make a new payment agreement regarding an old debt, it can restart the statute of limitations for collections clock. At that point, the debt collector could sue you in court no matter how old the debt is.

Get Help Repairing Your Credit

If you’re working to repair your credit, you may want to pay your debt off even if the statute of limitations has ended. For example, if you live in a state that has a 3-year statute of limitations on credit card debt, this debt may still show up on your credit report for up to seven years.

Paying this debt may be the only way to repair your credit before the end of the 7-year period by possibly reducing the impact of this debt by paying it off. If this is the case, the credit card company may work out a deal with you for a lower amount. Sometimes, these companies agree to remove some of the interest accrued to receive some money. This can be a good option for low-income families looking to repair their credit.  

Sign up for Credit.com today and take the first step toward understanding your credit and what factors are impacting your credit health.

Source: credit.com

Apache is functioning normally

Apache is functioning normally

Bankruptcy can happen to anyone—despite their best efforts. And while most people understand that bankruptcy is generally bad for them, many don’t realize the details of how it can impact you. Read below to find out what happens to your credit score after bankruptcy and what you can do to repair your credit afterward.

What Happens to Your Credit Score after Bankruptcy?

After bankruptcy, your credit score can plummet. It will have a devastating impact on your credit health. The exact effects will vary, depending on your credit score and other factors. But according to top scoring model FICO, filing for bankruptcy can send a good credit score of 700 or above plummeting by at least 200 points. If your score is a bit lower—around 680—you can lose between 130 and 150 points.

That said, people with good to exceptional credit scores will see the most notable impact of bankruptcy. If your credit score is already fair or poor—below 670—you may not see large point drops. Yet, the end result will often still be a very low credit score. You simply don’t have as many points to lose to fall to that very poor rating.

Additionally, lenders may hesitate to lend to you if there is a bankruptcy on your credit report.

Do All Bankruptcies Have Equal Impact?

The type of bankruptcy you file and the amount of debt you need to get rid of have varying effects on your credit score.

What Happens to Your Credit Score after Chapter 7 and Chapter 13?

Consumers and small business owners usually choose from two types of bankruptcy filings—7 and 13. These are chapters in the federal bankruptcy code.

  • Chapter 7: This option is designed to liquidate, or sell off, your non-exempt assets or valuable property. The proceeds are used to discharge, or wipe out, your debt. In most cases, debtors don’t have enough non-exempt assets to repay their debt. But the court discharges those bills anyway. Chapter 7 is reported on your credit report for up to 10 years.
  • Chapter 13: With this option, you can discharge some of your debt, like medical bills. Meanwhile, you can also partially repay other debts—like a home mortgage or car loan—over a three to five-year period. The three major credit bureaus include Chapter 13 bankruptcy on your report for up to seven years.

Of the two options, Chapter 7 has the more negative impact on your creditors. That’s because you make no repayments. So, financial institutions view you as a higher credit risk. Your score may take a bigger hit with Chapter 7 because of this negative impression.

With Chapter 13, you’re making good on some or all your debt. So, it isn’t reported on your credit report for as long as Chapter 7. Also, you may give future lenders a bit more of a desirable impression of your credit worthiness due to this payment history. This can translate to a slightly more beneficial outcome for your credit rating.

What Bankruptcy Debt Discharges Do to Your Credit

The number of debts and amount you discharge also impact your bankruptcy credit score. Defaulting on several accounts with large balances has more effect than low debt elimination. Your credit history may also play a role if you have positive accounts as well as negative ones. Whether the ratio between these accounts is high or low can make some difference in your score.

Overall, these factors don’t carry much weight for your credit score after bankruptcy, though. The bankruptcy itself and how recently you filed are the most important things that credit agencies and lenders consider. No matter how high your credit score was before a bankruptcy, there will be a noticeable drop immediately after filing. But over time, the impact lessens.

Though Chapter 7 stays on your report for up to 10 years, the debt you discharge may go away sooner. That’s because most negative accounts fall off your report seven years or so after any final payment or activity. But some Chapter 13 debts may show up on your report after the bankruptcy drops off. That’s due to the three to five year repayment time frame. The seven-year period doesn’t start until the account becomes inactive.

How Soon Can You Improve Your Credit Score after Bankruptcy?

Some people mistakenly believe that getting rid of a debt will help their credit rating. So, they think their credit score might increase after bankruptcy discharge. Unfortunately, making regular debt payments is the only method that could improve your credit. But, you can still start working on raising your credit score immediately after a bankruptcy.

Your score won’t go up right away. But the sooner you get started on good credit habits, the sooner the impact will show on your report.

Your low post-bankruptcy credit score doesn’t mean you can’t get some forms of credit. However, it will be more difficult and the terms will likely be expensive. Your best option is a secured credit card. Responsible use and timely payments can help you down the road to a better credit score.

How to Rebuild Your Credit Score after Bankruptcy

While the details of your bankruptcy may remain on your credit report for up to 10 years, this doesn’t mean you have to wait that long to rebuild your credit. There are steps you can take to restore your credit score after bankruptcy.

Over time, your credit score will start to rise if you’re handling credit responsibly. In fact, you may notice an increase in your credit score in as little as 18 months. This increase may be enough to help you obtain some forms of credit, such as a credit card or auto loan, even with bankruptcy on your credit report.

Here’s a look at several steps you can take to start rebuilding your credit score after bankruptcy.

1. Check and Monitor Your Credit Report and Score

It’s important to check and monitor your credit report and score after a bankruptcy. Start by requesting a free copy of your credit report from the three major credit bureaus. Next, check to make sure all the information listed is correct. For example, make sure every account included in your bankruptcy now reports a zero balance. Once you make this initial assessment of your credit report, use a service, such as Credit.com’s Free Credit Score, to regularly monitor your credit.

2. Dispute Any Inaccuracies

If you find any inaccuracies on your credit report, be sure to file a dispute with the credit reporting agency. This includes any accounts under your bankruptcy that don’t show a zero balance. The credit dispute process can take 30 to 45 days to complete, but it’s an important step to take. In many cases, you can complete the dispute process yourself, but you can also seek help from a reputable credit repair service company if necessary.

3. Make On-Time Payments

If you’ve had a bankruptcy, it’s more important than ever to be sure you’re making on-time payments. Building a history of on-time payments can help restore your credit score and show lenders you’ve taken control of your finances. If you haven’t done so already, create a budget to help manage your money. This step can ensure you always have enough funds available to pay your bills on time and help you set up an emergency fund.

4. Make Your Phone and Utility Payments Count

You may not realize it, but your phone and utility payments aren’t usually included in your credit report. Even if you pay these bills on time every month, it won’t impact your credit score. After bankruptcy, you need to make sure you get credit for every positive step you take.

Fortunately, there are services available, such as Credit.com’s ExtraCredit®, that help you report these payments to your credit report. Be sure to sign up for one of these programs as soon as possible.

5. Pay Down Debt

If you have any credit accounts that weren’t part of your bankruptcy, make sure you continue to repay these loans as quickly as possible. Do your best to pay off at least 70% of this outstanding balance to bring your credit utilization rate under 30%. For larger credit accounts, such as student loans, paying off 70% right away may not be possible. In these cases, making your regular monthly payments is enough to start rebuilding your credit score after bankruptcy.

6. Obtain a Secured Credit Card

Once you start rebuilding your credit, you may qualify for a secured credit card. This type of credit card requires you to put down some type of security, typically cash. Regularly using this credit card and making on-time payments is a good way to start repairing your credit. After a year or so of making on-time credit card payments, you may qualify for an unsecured credit card.

7. Control Spending

If out-of-control spending led to your bankruptcy issues, take the time to get control of your spending. Set a strict budget that allows you to pay all your bills plus set some money aside each month for savings. Once you start rebuilding your credit, resist the urge to open too many credit accounts. Instead, only open credit accounts that fit your budget.

8. Apply for a Credit-Building Loan

You can also consider taking out a credit-building loan. Typically, these are smaller loans for amounts such as $500 or $1,000, and they come with a set repayment schedule. These loans are specifically designed to help rebuild your credit. You may find credit-building loans available at smaller community banks and credit unions.

Start Improving Your Credit after Bankruptcy Today

To eventually raise your credit score after Chapter 7 or Chapter 13, you must stay aware and alert about your credit usage. Check your credit with Credit.com’s free credit report card. This provides you with a point of reference as you start rebuilding your credit.

Stay on top of your credit usage and how it’s reflected on your credit report. Access convenient tools that allow you to do this quickly and easily. Be smart and responsible with your finances. Then check on how your efforts are paying off with timely credit score monitoring.

Source: credit.com

Apache is functioning normally

Apache is functioning normally

If you decide to file for bankruptcy, you must next decide which type of bankruptcy is right for you. Most individuals have three options, and understanding Chapter 11 vs. Chapter 13 vs. Chapter 7 is important in making the right decision. 

Bankruptcy can be complex, and even a small mistake in how you file can substantially change the outcome of your case. It’s typically a good idea to consult an experienced bankruptcy lawyer before you file a bankruptcy petition. However, we’ve provided some basic answers below to the question, “What is the difference between Chapter 7, 11, and 13 when it comes to bankruptcy?”

In This Piece

Understand the Types of Bankruptcy

Bankruptcy is a way to reorganize your debts or get your debts dismissed because you’re insolvent. “Insolvent” is simply a financial state where you can’t pay your bills—usually because your debts outpace your income. 

People can end up in this situation for a number of reasons. It may be that you lost your job or had reduced income—job losses due to the COVID-19 pandemic are just one example of when this can happen. In other cases, people have unplanned expenses such as medical bills that can put them over the edge financially. Bankruptcy does have some benefits, such as potentially putting a stop to wage garnishments or foreclosures. 

Regardless of how you ended up in this position, it’s important not to jump immediately to bankruptcy. Consider all of your options and speak with an experienced bankruptcy attorney to understand whether bankruptcy will help you.

How Do You Know Which Bankruptcy Type is Right for You?

This is a complex personal or business finance question. Consider talking to an attorney to understand your financial and legal situation. An experienced attorney can quickly apply means tests and other information to your case to help you understand what your options are.

What Is Chapter 11 Bankruptcy?

According to the United States Courts, individuals and business entities can enter into Chapter 11 bankruptcy. Typically, this type of bankruptcy is a reorganization of a business. Through the bankruptcy, the debtor restructures and then creates and implements a plan to pay back creditors.

The plan must be approved by a Trustee appointed by the court. The Trustee is typically in charge of implementing and overseeing the plan, ensuring that the business has the income and resources to follow through with it. Once the plan is completed and confirmed, any remaining debts under the bankruptcy are discharged.

This is an extremely simple summary of how a Chapter 11 bankruptcy works. In reality, they can take years and involve numerous legal proceedings on behalf of the person or business filing as well as the Trustee and creditors. 

What Is Chapter 7 Bankruptcy?

The main difference when it comes to Chapter 7 vs. Chapter 11 bankruptcy is that Chapter 7 is a liquidation plan. That means there’s no repayment plan associated with a Chapter 7 bankruptcy.

When you file Chapter 7, you typically agree to liquidate your assets to pay off as much of your debt as you can. The remaining debts that are part of your bankruptcy are dismissed. 

Whether or not you can file for this type of bankruptcy is determined by income. If your income is below the median for the state you’re filing in, you can probably choose Chapter 7 bankruptcy. If your income is above the state minimum, you must pass a “means test.” A bankruptcy attorney can quickly apply these tests to help you understand whether you meet eligibility for Chapter 7. 

You don’t have to give up everything you own in a Chapter 7 bankruptcy, though. You may be able to keep exempt assets, which can include certain personal belongings. You may also be able to keep your home, a car, and other items, even if you owe money on them, if you can continue to make timely payments on those debts. 

Again, bankruptcy is a complex process and what you can keep and how your proceeding goes is based on a variety of factors. Consult an experienced bankruptcy attorney to find out more about your individual situation.

What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy may sound similar to Chapter 11 because these both involve repayment plans. But when it comes to Chapter 11 vs. Chapter 13, the biggest difference is that Chapter 13 allows someone with regular income to make an adjustment to how they pay back some debts.

Chapter 13 may be an option for individuals who fail the means test for Chapter 7. Typically, Chapter 13 bankruptcy works for people who have stable income to make some payments on debts but they don’t have enough income to pay all the debts as currently structured.

The individual submits a repayment plan to the court. This plan must be approved by a bankruptcy court Trustee. The Trustee is also typically tasked with making payments under the plan, so the individual pays the Trustee. The Trustee’s office then pays various creditors.

Usually during a Chapter 13 you only pay off part of your debts. Priority and secured debts, such as taxes or auto loans, are paid in full. But unsecured, nonpriority debts, such as medical bills and credit card debt, are only partially paid. If you work through your Chapter 13 repayment plan successfully, the remaining debts are dismissed at the end of the repayment plan. That can take three to five years. 

Should You File for Bankruptcy?

Only you can decide if bankruptcy is the right choice for you. In most cases, you should consider all your other options and ensure there really is no way to feasibly pay your debts as you agreed. Consider the factors below to determine which type of bankruptcy might be right for you. Then, talk to an attorney to find out more about each option.

Should You File for Chapter 7 Bankruptcy?

  • What is your income? Not everyone qualifies for Chapter 7 bankruptcy. You have to pass what’s called a “means” test, and you usually don’t pass it if you make more than the median income of same-size households in your state. 
  • Have you filed for bankruptcy before? If it hasn’t been long enough since the last time, you may not be able to file.
  • What type of debt are you dealing with? Most, but not all, debt can be discharged in a Chapter 7 bankruptcy. If you’re trying to deal with debt that isn’t dischargeable, it may not be worth filing Chapter 7.
  • Do you want to keep your property? Some property may be exempt, such as your home or a car you need, but you may not be able to keep the same property in a Chapter 7 that you could keep in a Chapter 13, for example. Definitely talk to your bankruptcy lawyer about which property you want to keep and whether it’s possible.

Should You File for Chapter 13 Bankruptcy?

You’ll need to ask all the same questions you’d ask when considering Chapter 7 bankruptcy to find out if Chapter 13 is right for you. You also need to consider whether you have enough income to make some repayment toward your debt. In a Chapter 13 bankruptcy, you restructure your debts and pay some of them over 3 to 5 years before the rest are discharged.

You should also ask yourself if you have the discipline to make the monthly payments to the trustee and follow other rules set by the court. You typically can’t apply for most types of credit, including a mortgage, auto loan or significant personal loan, without getting the court’s approval if you’re in the middle of a Chapter 13 bankruptcy, for example.

Should You File for Chapter 11 Bankruptcy?

Do you have your own business and need to include business debts in your bankruptcy? You might want to consider a Chapter 11 over a Chapter 13. Chapter 11 may also be an option for individuals or couples who have too much debt to qualify for a Chapter 13. Otherwise, all the other questions above apply here, too.

The Main Differences Between the Types of Bankruptcy

To better understand the main differences between Chapter 7, 11, and 13 bankruptcy, consider the table below.

Chapter 7 Chapter 13 Chapter 11
Type of bankruptcy Liquidation Reorganization Reorganization
Income requirements Yes — can’t make above the median for same-size households within the state Yes — must have enough income to make the repayment plan viable Yes — must have enough income to make the repayment plan viable
Can individuals file? Yes Yes Yes
Can businesses file? No Only sole proprietors Yes
How long does it take? A few months 3 to 5 years 1.5 to 5 years
Debt limitations n/a Combined secured and unsecured debts must be less than $2,750,000 n/a

Who Can File for Each Type of Bankruptcy?

In addition to income and debt requirements, each type of bankruptcy has limitations on which individuals or entities can file. 

Chapter 7 Chapter 13 Chapter 11
– Individuals
– Married couples		 – Individuals
– Married couples
– Sole proprietors		 – Individuals
– Married couples
– Sole proprietors
– LLCs
– Partnerships
– Corporations

What Happens After You File for Bankruptcy

The first thing that happens when you file for bankruptcy is that the automatic stay goes into place. This is a protection that requires creditors to cease all collection efforts until the bankruptcy process can be completed. It’s a powerful protection. For example, even if you’re in the middle of a home foreclosure, the automatic stay can stop that process so you can work through bankruptcy to keep your home.

Once the petition is filed with the court, hearings are set and all creditors included in the bankruptcy are notified. They do have the option of responding to the bankruptcy if desired. You’ll also need to attend the first hearing in your case to testify, under oath, to the truth of everything documented in your petition.

If you’re filing a Chapter 11 or Chapter 13 bankruptcy, you’ll need to file a repayment plan, get approval for it and follow through on it. Once the bankruptcy process is completed successfully, your remaining debts can be discharged. 

How Does Bankruptcy Impact Your Credit?

Any type of bankruptcy can impact your credit. It’s a negative item that stays on your credit report and drop your credit score for up to 10 years, depending on which type of bankruptcy you file.

But the truth is that by the time most people get to bankruptcy, they’ve already missed numerous payments and may be in collections with one or more accounts. If this is the case, bankruptcy doesn’t usually drive your credit score much lower than it already is. And there’s a chance that you may see your credit score begin to climb again after bankruptcy as you make timely payments on debts and are better able to manage your finances.

Chapter 11, Chapter 7, or Chapter 13—these are all huge financial and legal decisions. Each comes with its own pros and cons, and it’s important to handle a bankruptcy correctly if you do decide this is the way you want to go. So, talk to a lawyer and get the information you need to make the best decision in your case.

  • Chapter 7 is removed 10 years after the date the petition was filed.
  • Chapter 13 is removed 7 years after the date the petition was filed.
  • Chapter 11 is removed 10 years after the date the petition was filed.

Want to keep an eye on your credit report to understand when negative items fall off it as you’re working to rebuild? Consider signing up for ExtraCredit.

Options Other Than Bankruptcy

Before considering bankruptcy, research other options to help manage your debt. You might find other avenues that are less complex and not as impactful to your credit reports. They can include:

  • Debt consolidation that reduces how many bills you deal with each month and may create a monthly payment situation that works better for your budget
  • Debt counseling that brings in professionals who can help you negotiate with your creditors for better terms and manage your money better to make ends meet
  • Selling property so you can pay off debts that are beyond your current budget
  • Increasing your income with a second job or side hustles so you have more money to pay your debts

Ultimately, whether bankruptcy is right for you is a decision you must make yourself. Start with the information above to gain a brief understanding of your options, and reach out to an attorney to help you understand how these details might apply to your case.

The Impact of COVID-19 on Bankruptcies

Bankruptcies are still proceeding in the wake of the coronavirus pandemic. You may find that hearings related to cases are being handled via phone or web conferencing and not in person.

If you’re making payments on a Chapter 11 or Chapter 13 case and have been impacted financially by the pandemic, you should contact your attorney as soon as possible. They can help you understand the best next steps, which might include filing motions in your case to alter your payments temporarily.

The CARES Act also provides some modifications to how certain elements of bankruptcies are handled. It ensures federal stimulus payments aren’t considered disposable income, for example, and provides Chapter 13 debtors a path to seek modified payment plans if their income is impacted. 

Source: credit.com

Apache is functioning normally

Apache is functioning normally

I own one rental property out of my area in Cleveland Ohio and we just got that tenant out after she did not pay rent for three years! All of my other rentals are in Colorado and I usually have no problems with evictions or getting tenants out, yes even during the Covid year. However, I learned that some cities and states can be a nightmare and do everything they can to make life difficult for landlords, especially out-of-state landlords. If you are going to invest in real estate in other areas make sure you do your due diligence!

Why did it take so long for me to get a non-paying tenant out of my rental?

I bought this turn-key rental in 2015 in my IRA. I have many other rentals in Colorado that I bought in a more traditional way but this house was sold to me by a friend, or so I thought, for $45k. It was supposed to be rented and managed but that’s another story. The rental was fine until COVID came along and the city started to pay rent for tenants. My tenant stopped paying rent and when the City of Cleveland stopped paying landlords the tenant never paid rent again.

I had a property management company that was mostly worthless and incompetent. I won’t mention their name, actually, I will, Monument Real Estate. I told Monument to evict and months went by with nothing happening. At first, Monument said I could not evict because the property needed to be certified lead-based paint-free which the City of Cleveland requires on all rentals built prior to 1978. However, my property was exempt because it was built in 2005. I told Monument this for months before they understood.

After we got that figured out, Monument said I could not evict because my IRA needed to be registered in Ohio for the Cleveland courts to hear the eviction case. The company that I used said they would not register in Ohio. I talked to multiple lawyers and they all said I was pretty much screwed because an IRA is not a corporation and you can’t register it. This went on for months more and eventually I had some help from commenters on my YouTube videos. They told me to try different lawyers and one told me to try a property management company that had helped them in difficult situations.

After the tenant not paying rent during COVID, the months the property management company argued with me over lead-based paint, and trying to figure out the registering my IRA, it had been close to three years, and the tenant never paid a dime.

How was I able to finally get the tenant out?

While this was happening I asked the property management companies to offer cash for keys. Cash for keys is when you pay someone to leave a house. The tenant never responded to any notes or calls. I switched property management companies and the new one also tried cash for keys with no success. The new property management company did help me get my IRA registered. They told me to register as a corporation with the Secretary of State (SOS) in Ohio. I told them the lawyers said that wouldn’t work but they told me to try anyway.

I tried to register as a corporation and it didn’t work. The SOS said an IRA is not a corporation and can’t be registered as one, but they were very helpful and worked with me to find a solution. Eventually, the SOS helped me to register the IRA name as an entity doing business in Ohio. It took some time but we got it done and with that registration, the courts agreed to hear the case!

At the first hearing, nothing was done except to schedule another hearing. The tenant was given a free attorney by Cleveland to help fight the eviction. My property manager told me we should offer cash for keys in court because the judge will see we are trying and the tenant has to respond. I agreed to offer $2,000. The rent on the property was less than $800.

While all of this was happening the property management company said the tenant was suing them for $35k! I could not believe it until I got a package in the mail from the tenant and they wanted $35,000 from me as well! They said they needed $10,000 for cash for keys to move out and $25,000 for emotional distress from the notes and calls my property management companies made trying to offer cash for keys.

I was not hopeful she would accept the cash for keys in court, but she did! She had to move out in about 30 days and if she did not we could file for an immediate eviction. The tenant moved out and I have my house back.

The YouTube video below goes over the story and shows the house

[embedded content]

How could I have avoided this nightmare rental?

I take full blame for this situation as I should have known better. I made a few mistakes:

  • I trusted someone too much: I trusted someone who said they knew the area and that this was a good deal. None of that was true and if I had had a third party check out the property I would have known never to buy it.
  • I trusted the property management company given to me: That person also recommended a property management company that stopped doing rentals and then they recommended Monument and I never checked them out myself. I should have done way more due diligence.
  • I didn’t fire a bad property management company as soon as I knew there were issues: I knew Monument was bad since they messed up my accounting before, and kept making mistakes, not communicating, and were flat-out rude. I was lazy and waited too long to hire a new one.

How to buy out-of-state rentals the right way.

Conclusion

If I were to buy out of my area again, I would do way more due diligence and most likely not use a turn-key company. I would find an agent, and property manager and use them to find a great deal wherever I wanted to invest. I would have a third party checking things out and not trust people as much as I did. I can handle the nightmare this became because my other rentals have done very well but a new investor without other investments could have huge problems in the same situation.

Build a Rental Property Empire

Categories Rental Properties

Source: investfourmore.com

Apache is functioning normally

Apache is functioning normally

Homebuilders are to blame for the current housing and mortgage crisis, according to a report released by the Laborers’ International Union of North America (LIUNA).

The group’s report focuses on mortgages originated between 2005 and 2006 in Maricopa County, Arizona by the lending units of three of the nation’s largest homebuilders, including Richmond American, Lennar, and KB Home.

More than one-third of the mortgages originated by these homebuilders in the county are five-year adjustable-rate mortgages expected to reset between 2010 and 2011, and with many of these homeowners now underwater, they could face serious payment shock.

Per the report, in just the last year the value of Lennar homes has declined $61,600, KB Home values have sunk $55,600, and Richmond American Homes are worth $49,500 less.

In the KB Home Santarra Development in Buckeye, Arizona, home values have dropped a staggering $78,800 in the last year, troubling because 55 percent of mortgages held are five-year ARMs, and 63 percent of purchase loans have a second mortgage.

“Former Countrywide-KB Home Loans Regional Vice President Mark Zachary has said in court that KB Home pressured its lending joint venture to engage in systematic mortgage fraud to drive sales, including encouraging inflated appraisals, assisting buyers in supplying false income information, and approving loans without review or documentation,” the release said.

LIUNA, which earlier this year exposed the homebuilder tax break in the Foreclosure Prevention Act, is calling on agencies such as Fannie Mae and Freddie Mac to place greater scrutiny on the mortgages originated by homebuilders and their mortgage lender partners.

Source: thetruthaboutmortgage.com