The Money Puzzle

Credit identity theft is a growing problem in the USA and around the world. It’s so easy for a criminal to steal your identity through and use your credit to fund their lavish lifestyles. Unfortunately for you, you’re the one who ends up with ruined credit and saddled with outrageous debt over the whole thing.

Of course, credit identity theft doesn’t just result in ruined credit for the victim. People have also been arrested for crimes they didn’t commit, thanks to the actions of identity thieves. These thieves commit crimes while using your stolen identification, so when they’re arrested, they have your Social Security number, driver’s license number, and other identifying documents that can make the police believe they’re you. Once out on bail, they’re free to commit more crimes, and a warrant is usually put out on them in your name. If you’re unfortunate enough to get pulled over by a police officer for speeding or a broken tail light, you’ll be going to jail, and it may be quite a while before you can straighten out the situation. It’s happened to other people, and it could happen to you.

Fortunately, there are things you can do to protect yourself from identity theft. Here are some of the most important things you can do:
 
 Never give out your Social Security number over the phone and never put it on any documents unless legally required to do so. Once a thief gets hold of your Social Security number, there’s virtually no end to the havoc he can wreak on your life.

 Shred all papers containing private data about you, such as your Social Security number, credit card numbers, driver’s license number, etc. Invest in an inexpensive shredder for this. The small investment is worth it for your peace of mind.

 Don’t have checks delivered to your house. They can easily be stolen out of your mailbox. Instead, pick up new checks at the bank, and have new credit cards delivered with signature required, so you don’t have to worry about theft of your identity through the mail.

 Check your credit report every six months to be sure there are no unauthorized accounts there. If so, report it to the credit reporting agency and dispute it if you have to. Also dispute the ownership of fraudulent accounts with the listed creditor. You’ll have to supply proof the account isn’t yours, but if it really isn’t your account, this proof won’t be hard to obtain.

 If you do all of these things, you’ll be taking a proactive approach to protecting yourself against credit identity theft. If you don’t take steps to protect yourself, you’ll wish you had, in the event your identity is stolen. Identity theft is one of the most difficult problems to clear up, because once your good name is tarnished, it’s a long-uphill battle to reclaim it. Start now and avoid problems in the future. You’ll be glad you did.

This is the second installment in our identity theft series. Be sure to check back for updates…

When it comes to identity theft protection, it’s better to prevent it from happening entirely than to clean it up afterward. Identity theft is a quickly growing crime in the world, and thousands of people become the victims of it every day. These people are often victimized due to their own carelessness—carelessness that could have been easily prevented.

Identity theft occurs when a person’s private data is stolen for nefarious purposes. The thief then uses that data to assume the identity of the victim to apply for loans, credit cards, and other financial services. When these loans aren’t paid back, as is usually the case, the victim’s credit record suffers, making it difficult for him to get additional credit in the future. This can prevent the victim from getting a house, a car, or even a job, if the job application involves a credit check.

Fortunately, some simple precautions will offer you some solid identity theft protection. First, never give out your private data, such as Social Security information or credit card numbers, to anyone if you’re not absolutely sure of who they are and what they represent. Keep your PIN number blocked from view when you’re typing it into an ATM machine by holding your hand over it. Shred all important documents about you that have your personal data on them. If your purse or wallet is stolen, report any credit cards that were in it stolen right away, so you won’t be held responsible for any unauthorized charges.

One of the most powerful things you can do to provide yourself with identity theft protection is to monitor your credit report. Your credit report will change based on credit activity in your name, and it’s usually updated pretty quickly. The cheapest way to monitor your report is to sign up for a credit monitoring service. Most of these charge just a small monthly fee, and will alert you to any changes on your report as soon as they’re posted. By keeping an eye on your credit report, you’ll be able to see instantly if something isn’t right. If you do find something suspicious, you can report it and start an investigation. Most identity theft victims eventually get their lives back and their credit straightened out, and most thieves are eventually caught. However, it’s better to not go through any of this in the first place. Protect yourself and your credit rating by practicing common sense techniques to keep your personal data secure.

This is the first installment in our identity theft series. Be sure to check back for updates…

If you’re behind on your mortgage, or even facing foreclosure, you may want to consider a loan modification. This will change the terms of your mortgage, often catching you up on missed payments and saving your home. The first step in the process is, of course, contacting your lender. However, before you get started, it’s good to know the answers to some common questions about adjusting your mortgage.

First of all, if you’ve accrued any late fees on your mortgage, HUD requires that your lender waives those fees for your loan modification. This is good news for you, as late fees can run into the hundreds, and even thousands of dollars. However, in order to get the modification approved, you’ll have to supply your lender with proof of income and other financial information in order to show that you’re able to make the new payments.

Further, you don’t even have to be currently late on your payments to apply for a modification. All you need to do is show your lender that you’re no longer able to afford the mortgage payments as they currently exist. If you’re falling behind on payments (or about to) due to a divorce, death of a co-borrower, job relocation, illness, or military service, your lender will give you special consideration in the modification approval process, as these circumstances are considered hardships. You’ll need to supply a letter detailing your hardship when you send in your application.

Missed payments can often be worked back into the new loan and spread out over a period of time to help you get back on your feet. The entire purpose of a loan modification is to stop foreclosure and get you current on your mortgage again, so lenders are willing to do what is necessary to make this happen, as long as your requested terms are reasonable.

be aware that your lender will usually require a large up-front payment to get the loan modification process started. However, if you’re in real need and your income qualifies you, that large fee will most likely turn out to be money well spent as you’re given the chance to save your home.

This is the seventh installment in our foreclosure series. Be sure to check back for updates…

What happens after foreclosure? Most of us know that foreclosure is the process through which a lender takes legal ownership of a home to recover the cost of an unpaid mortgage. It’s an ugly situation that no homeowner wants to find himself in, but that’s becoming more and more common as the nation’s housing crisis deepens. In fact, hundreds of thousands of foreclosures are filed by lenders each month, and that number is growing. Most people try to stop the loss of their home to the bank, either by working out a payment arrangement or selling the property. Very few really know what happens if the foreclosure goes through. For homeowners facing this prospect, this is very important information.

When a foreclosure runs to its conclusion, one of four things usually happens:

*The homeowner pays off the mortgage, usually through a refinance, but sometimes through cash. Once the mortgage note is paid off, the foreclosure becomes null and void. The homeowner can pay off the mortgage at any point during the proceedings, right up until the time the bank takes possession of the property.

*The homeowner sells the property for the full amount of what’s owed on the mortgage. Again, this pays off the loan and stops the bank from taking possession. The house can be sold by the homeowner at any point, right up until the foreclosure auction.

*The home is sold at a public auction. Depending on the state, this auction may be held on the courthouse steps, at the home, or elsewhere. The highest bidder gets the deed to the property, and is usually required to pay cash.

*The bank takes possession of the property.  This usually happens when there are no bidders on the property at the auction, or no one bids high enough to satisfy the lender. Banks can also take possession of the property through a deed in lieu of foreclosure arrangement with the homeowner (the homeowner gives the deed to the lender on a voluntary basis). Once the bank owns the property, it becomes known as a REO (Real Estate Owned by lender), and the lender is responsible for its upkeep and maintenance. As can be imagined, lenders typically try to sell REO properties as soon as possible, as these are a great expense to them.

After the foreclosure has been completed, there may be a redemption period in which the homeowner can still reclaim the home. Not every state has a redemption period, so be sure to check your own state laws if you’re facing foreclosure. Redemption periods can last from a few days to a month or more, and you can not be evicted from your home during this time, even if the home has been sold at auction. If you’re able to come up with the money to pay off the mortgage during the redemption period, you get to keep ownership of your home. If your state has no redemption period, then you’ll likely have to leave the house as soon as the foreclosure sale is complete. It’s important to know what happens after foreclosure, so you can be sure your interests are protected and your full rights are exercised during the entire process.

This is the sixth installment in our foreclosure series. Be sure to check back for updates…

Can bankruptcy stop foreclosure? That’s a question many of today’s unfortunate homeowners are facing. Bankruptcy is never something anyone wants to do. It’s a terrible blemish on your credit that stays there for 10 years, and can keep you from getting additional credit or good loan rates. Yet, losing your house is an even worse option, and the prospect of it leads many homeowners to consider options that would normally never cross their minds.

So, can bankruptcy stop foreclosure? The answer is yes and no. It all depends on what kind of bankruptcy you choose. Here are your two options:

1.  Chapter 7 Bankruptcy. In this procedure, all of your assets are liquidated to pay off your debts. The court normally then absolves you of the remaining debts that couldn’t be paid. For some people with no assets, all of their debt ends up getting absolved. A Chapter 7 filing will usually put a temporary stop on foreclosure proceedings, while the case is moving through the court. This may give you some extra time to work out a payment arrangement with your loan company or to sell your home. However, once the bankruptcy case is closed, your lender can resume proceedings against you if you haven’t taken other measures to make good on your mortgage payments.

2.  Chapter 13 Bankruptcy.  If you want to stop your foreclosure through a bankruptcy filing, this is the way to do it.  A Chapter 13 is a re-organization of your debts. Your debts are often consolidated, and you make a monthly payment to the court until your obligations are paid. You can usually include your mortgage in with your other debts, which forces your lender to accept a payment plan from you. You’ll be able to make up your back payments and get back on track with your mortgage this way, and your lender can’t take your home as long as you make your payments to the court on time.

The most important thing to remember is that you need a qualified bankruptcy attorney to navigate this complicated process for you. Fortunately, you can often retain this kind of attorney for less than $500. If you’re facing the loss of your home, it’s definitely worth the money. It will take several months for your case to go through the court system, and your attorney will make sure you understand every step of the process. If you’ve wondered, “Can bankruptcy stop foreclosure?,” you now know the answer. If you’ve decided this may be a good option for you, consult an attorney in your area for more detailed legal advice regarding your particular situation, and get yourself on the road to financial recovery while keeping your home!

This is the fifth installment in our foreclosure series. Be sure to check back for updates…