There is a difference between defaulting on unsecured debts and secured debts. I defaulted on unsecured debts.
First, remember that I’m not a lawyer and I’m not giving legal advice, but if anyone is telling you that you can default on a secured debt and end up keeping the asset, you’re getting bad advice. If the debt was secured they can repossess that asset. They can seize the asset itself and any other assets you may have that would cover the total debt you owe. There is a process they have to follow.
For example, if you default on a car loan they can repossess the car and sell it at auction (read pennies on the dollar). They won’t sell the car for as much as you owe on it so they will sue you for the difference. You can attempt to work out a payment plan with them by appearing in court and presenting your financial situation to the judge to get a payment plan or some other relief the judge orders. You will lose the law suit because you owe the money. The legal term for what the collector now has against you is a judgment.
If you didn’t appear in court they can take further legal action. They will get a writ of garnishment and/or seizure. That means they can garnishee your wages and seize any money in your bank accounts. They can come into your house and take assets until they have enough in value to pay off your debt at sheriff’s sale prices, which amounts to pennies on the dollar. They can take your family heirlooms, the baby’s crib, your furniture and electronics, whatever they decide until they have enough to cover what you owe. You can’t stop them or you will be arrested and put in jail. They bring the sheriff with them in case you cause any trouble.
I don’t know much about foreclosures on a first mortgage beyond what I’ve heard and read, but I know they take your house and sue you for the difference between what they sell it for and what you owe. They don’t usually come in and take your personal assets but they can.
If you default on a second mortgage, either a home equity loan or line of credit, they usually don’t want the house, they want their money. Defaulting on a second mortgage will usually get you sued and your wages garnisheed unless you can work out a payment plan in court or with the creditor before they file for a writ of garnishment. You will very likely end up with payments or a settlement for a second mortgage default, unless it’s for most of the value of the property.
Dealing with Repossessions and Foreclosures
There are ways to deal with repossessions and foreclosures. You can file for bankruptcy protection and get the repossessions and foreclosures under it so the debt is settled. You lose the assets but they can’t come after you for the differences you would owe outside of Chapter 7 bankruptcy. If you file a Chapter 13 bankruptcy, these debts will be a part of the total debt settlement agreement the court makes with you. After paying off the Chapter 13 bankruptcy (5 years), you no longer owe any of the debts that were discharged.
If You’re Not Bankrupt
If you’re behind on a car payment:
- catch it up and keep it current while you –>
- sell the car yourself before they repossess it. You’ll get more for it and may be able to finance the difference with a local small bank or credit union. Since the difference between what you owe and what you sold the car for will be much smaller, it’s less likely that they will try to seize your assets.
- work out a payment plan in which they don’t sue you and garnishee you wages or seize your assets
- get sued and have your wages garnisheed. If they sue you, you can appear in court and present your total financial situation to the judge, even though you will lose the suit, and the judge will set the payment terms.
- come up with the cash yourself. It would be better to take a cash advance on a credit card to pay these sharks off than to allow them to continue to harass you.
- If you don’t appear in court and work something out or pay the debt, expect further legal action that you won’t like including writs of garnishment and seizure
It’s in your best interest to make one or more of the less distressful options work for you than to allow the finance company to continue taking legal action against you.
If you’re behind on your mortgage payments you can do the following:
- work out a catch-up plan with the mortgage company (get the agreement in writing)
- sell your house for the amount you owe on it and pay off the mortgage(s)
- do a short sale without recourse (the price you get is less than what you owe on the house but the bank agrees in writing not to come after you for the difference)
- do a short sale with recourse (you have to pay the difference somehow and the bank will likely sue you)
- do a deed in lieu of foreclosure where you give the house back to the bank (with or without recourse)
- as a last resort, the bank forecloses on your mortgage
You have a lot of options when you’re facing foreclosure, and foreclosure is your last resort if you can’t make any of the other options work for you.
Banks and mortgage companies will work with you on other options if you’re persistent, have a written plan or actual offers to present to them, and you sit down with someone at the bank or mortgage company face-to-face who has the authority to make a deal with you and put it in writing.
The bank really doesn’t want your house. If they end up with your house then they have to sell it. Foreclosure sales are usually by auction at the court house directly after a set of properties are foreclosed on. The bank or mortgage company will then sue you for the difference between the auction sale price and what you owe. They will win the judgment and can take further legal action to garnishee wages and seize money and other assets. Again, it’s in your best interest to work something out before a foreclosure happens.
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June 15th, 2008
Posted by
joubess |
Legal Issues, Resources |
4 comments
It’s true! The Blog Mastermind Mentoring Program will open its doors again to new members in June who want to learn how to become professional bloggers.
In a previous post, How to Start Blogging for Beginners, I discussed the basics of becoming a blogger and posted links to free material to teach you how to start a blog and start writing posts.
Yaro Starak, the Blog Mastermind Mentor, recommends you do one thing prior to the program reopening if you plan to sign up:
Download (free) and read/listen to the Blog Profits Blueprint. You can download the ebook version and the audio version. I recommend both if you like to listen to audio books. You’ll still need the pdf file with the links to accomplish some of the learning. Click on the banner below:
If you are new to blogging or want to review how to start a WordPress blog, follow this link to free video lessons:
BecomeABlogger.com
I’ve been using WordPress for over 6 months and I learned a few very useful tid-bits from BecomeABlogger.com. If you’ve taught yourself WordPress by the seat of your pants, I recommend reviewing these free lessons.
Sherri Joubert
Blog Mastermind Student
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May 26th, 2008
Posted by
joubess |
Resources |
no comments
I’m often asked how one goes about starting a blog. It’s not hard, but it can seem overwhelming until you jump in and start writing your first one. I recently ran across a great set of free video tutorials on the absolute basics of how to start blogging for the complete beginner.
My mentor, Yaro Starak, and his friend, Gideon Shalwick, put together a free series of 10 short videos (5-15 minutes each) that take you from square one - knowing nothing about blogging - and teach you everything you need to know to set up and start posting to your own WordPress blog.
These free videos are a gold mine of information I wish I’d had when I started. I watched all 10 this afternoon and I learned a few things I didn’t know. It never hurts to review the basics, especially when you learned them by the seat of your pants!
Here’s a summary of the 10 video topics:
- Why you should use WordPress
- How to get your own domain name
- How to get a web host
- How to install WordPress with one click
- How to upload files to your web host using FTP
- Choosing a WordPress theme for your blog
- How to install and use WordPress plug-ins
- How to create your first blog post and blog page
- What RSS is and why you need it
- How to use FeedBurner for supercharging your RSS capabilities
Here’s the link to the website containing the free videos:
http://becomeablogger.com
After watching the videos, you have the option of signing up for Yaro Starak’s Blog Traffic Tips Newsletter and downloading his Blog Profits Blueprint, a free report that tells you everything you need to know to eventually make a living blogging. I’ve read it and work by it, and it’s not an over-night success, get-rich-quick gimmick. It’s solid information that will require you to put in a lot of work if you want to earn at least part of your living blogging. You may become able to quit your day job after your blog(s) take off.
Again, signing up for the newsletter and Blog Profits Blueprint are optional and completely free.
So have a look at the free videos and maybe take a gander at your own blog, even if it’s just something you want to produce for your friends and family to stay connected. You don’t have to share it with the whole world if you don’t want to 
Here’s the link again:
http://becomeablogger.com
I wish you all the blogging success you desire,
Sherri Joubert
Blog Mastermind student and Blog Profits Blueprint follower
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March 25th, 2008
Posted by
joubess |
Resources |
8 comments
I switched my email subscription service to Aweber. There are several reasons for this, the main ones being more control over frequency of updates and a more readable format.
Those of you who subscribe to this blog by email will see a change this week. Rather than getting an email whenever I publish a new post, you will now receive a weekly digest of new posts in newsletter format.
You will also receive a new opt-in form from Aweber confirming that you still want to receive updates from this site. You will continue to receive updates from the Feedburner service until you opt-in with Aweber, but you won’t receive emails from both services.
I’m trying a weekly schedule as the initial time frame. If it’s too often for the number of new posts I publish, I’ll change it to biweekly, semi-monthly or even monthly.
I value and would appreciate your feedback on the newsletter format and frequency of delivery. Please leave comments and let me know if I need to make changes.
Thank you,
Sherri
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March 8th, 2008
Posted by
joubess |
Resources |
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Do you remember the Paul Simon song “50 Ways to Leave Your Lover”? I always liked this song because it cut through all the bull about doing what needs to be done, leave. No excuses.
I used the same mindset to make a list of 50 ways to leave your debt.
- Extra job
- New job
- New career
- Inheritance
- Receive a gift of money
- Win a law suit
- Tax refund
- Refund of other type
- Tutor students in subjects you’re good at
- Clean houses
- Mow yards
- Garage sale
- eBay sale
- Craft sale at flea markets
- Snack and drink sale along with a garage sale or craft sale
- Book sale
- Wash houses
- Paint houses
- Repair furniture
- Build furniture and sell it
- Make clothes and sell them
- Change oil in cars
- Detail cars
- Minor home repair
- Honey-do list service
- Write an ebook or report and give away for small donations
- Accept donations
- Sell a piece of land
- Sell a house
- Sell a car
- Sell all your electronic gadgets
- Sell your kid’s old video games
- Sell music CDs you don’t listen to any more
- Sell your vinyl record album collection
- Sell movies you don’t watch any more
- Sell your old camping equipment
- Sell a camper
- Sell your unused dishes
- Sell your unused small kitchen gadgets and appliances
- Sell old, unused furniture (not family heirlooms)
- Sell advertising on your blog
- Sell old luggage
- Sell old or unused software
- Sell old but useful computer (wipe your stuff off of it first)
- Sell your old printer
- Sell your old modem
- Sell you cassette tape deck
- Sell your cassette tapes if you don’t listen to them any more
- Sell a collectibles collection you no longer want
- Sell your used textbooks
Ok, that didn’t take very long. Let’s try another 50.
- Beg at the interstate off-ramp
- Play music in a downtown outdoor mall for donations
- Draw caricatures in a mall
- Be a clown part-time
- Become a wedding planner part-time
- Freelance at anything you can in your spare time
- Work at your child’s school if you’re the parent home with the children
- Open a home-school
- Open a day care
- Open a day camp
- Work at the YMCA as a camp counselor during the summer if you work a school schedule
- Write a book and sell it
- Throw boxes at UPS part-time
- Deliver pizza’s in a wealthy neighborhood
- Throw boxes at FedEx part-time
- Join the National Guard
- Join the Navy Reserve
- Join the Army Reserve
- Sell Avon
- Sell Mary Kay
- Sell Amway
- Bookkeeping for small businesses on the side
- Help small businesses with QuickBooks
- Assist an accountant part-time
- Work at a coffee shop
- Work at a bookstore
- Work at a casino (but never play there)
- Help people organize their homes
- Work for an elderly person doing small chores they can’t do anymore
- Shop for the elderly or a busy executive, doctor or lawyer
- Run other peoples’ errands
- Sharpen knives and tools
- Be a wait-person at a restaurant
- Shovel out horse stables
- Dog grooming
- Dog kenneling
- Veterinary assistant
- Nursing assistant
- Night commercial building custodian
- Security guard
- Work night shift at a hotel
- Night help desk for a business
- Answering service
- Work part-time at FedEx/Kinko’s during evening and night hours
- Make a cookbook out of all your recipes, self-publish and sell it
- Collect aluminum cans and turn them in for cash
- Trim trees and bushes
- Give an inexpensive seminar on a topic you’re proficient at and charge $10 - $20 per person or couple
- Bartender
- Declare bankruptcy (as a last resort and only if it will help you)
The second list took a lot longer. But there you have it, 50 + 50 ways to leave your debt.
Now stop reading blog posts and get busy! I’m quiting writing for today and getting busy with a few of the above that I can do right now. It’s time to take action!
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February 6th, 2008
Posted by
joubess |
Resources |
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