Most people who are thinking about doing a short sale want to know what happens to the unpaid loan balance after the sale. Homeowners often ask me if they are going to be responsible for the difference between the reduced amount their bank receives at closing and the amount they actually owed for their mortgage. After a short sale, your lender will either:
1) Issue you a 1099C*
2) Pursue a deficiency judgment against you in court*
3) Do nothing
*A bank cannot issue a 1099C and pursue a deficiency judgment against you at the same time-they must choose one or the other
The unpaid loan balance after a short sale will most likely result in a 1099C. By issuing you a 1099, your bank gets an immediate tax benefit from a short sale. The 1099 your bank sends you after a short sale can register as income, which may result in you owing taxes. However, there are many exceptions that exclude canceled debt for tax purposes, so a 1099 may not adversely affect you. You should speak with a competent accountant for advice on the financial consequences of a 1099.
After a short sale, your lender may pursue a deficiency judgment against you. A deficiency judgment only occurs if a bank sues a borrower for the unpaid loan balance after a short sale and wins the court case. If the bank wins, the borrower is legally required to pay the amount of the judgment (Note: retirement accounts are generally protected from creditors even if a bank wins a deficiency judgment in court).
Although it is a possibility, mortgage lenders rarely pursue deficiency judgments against borrowers after a short sale because the process is expensive and time consuming. Your lender would have to take you to court, hire local attorneys to file the lawsuit, get a judgment from the court and then have it enforced in the county where you live (assuming they can find you). If the lawsuit paperwork is filed incorrectly, the deficiency judgment can actually be overturned. Moreover from the bank’s perspective, if you had the money to pay a deficiency judgment, you probably wouldn’t have missed your mortgage payments in the first place.
Before a short sale is completed, banks sometimes ask homeowners either to make a one time payment at the closing table or accept an unsecured promissory note for some or all of the unpaid debt being forgiven. Like collection calls, this is another attempt by the bank to reduce its losses. Sometimes bank representatives use scare tactics over the phone to threaten or intimidate borrowers. Aggressive collection agents have been known to lie in a desperate attempt to get more money from borrowers. It is always your choice whether to accept or reject a promissory note request from a lender.
So, how will you know what your bank will do with your unpaid loan balance after a short sale? Unfortunately, there is no way to know for sure. In most cases, it pays to be proactive and tell your lender exactly what you want them to do, which ideally is to accept the short sale as payment in full for your mortgage and give you a waiver of deficiency. You can call your lender and ask them to do this or simply write the request directly into the sales contract you sign with the buyer purchasing your property. There’s no guarantee, but your effort can only help your chances.
There are traps out there in the land and we wanted you to know about one such entanglement that you need to be made aware of. You need to be very careful when dealing with any form of debt consolidation loans agency especially the numbers and terms of these beneficial normally loan instruments. One such trap that we will discuss today is the loans balance transfer snare. This marketing ploy is set-up to reel in the clients that see the outside only of this form of cash draining and not the real issue the numbers game.
Understand the Lay of the Land
In order to be very careful concerning the debt consolidation loans balance transfer trap you need to know what to look for first of all. The signs will start out as an overly-persuasive marketing gesture as this is all about luring you in quickly with inflated-promises before you even have time to really look at the percentages and terms of the contract. All you see is the lowered-annual percentage rate and that is where mistakes occur and the trap is set!
Do not allow yourself to be tricked anymore! Pay very close attention to the marketing tricks as these normally tell you that something is not quite right with all this. A true debt consolidation loans professional will only have a short and sweet marketing effort and will instead have a sincere approach to your issue of deep-debt and credit woes. You will have a gut-feeling almost immediately concerning the debt relief firm and this will be the first real sign that things are safe, for the moment.
Pinch of Ethics
The debt relief agencies that are online today are divided into those that do it with a pinch of ethical behavior and those that could careless about your life and your debt. Those are the ones that will be armed with the trap that is paraded as a great idea! Make certain that you heed our words here today on this page and save yourself and your family years of frustration and thousands of dollars in well-intentioned but wrongly-placed monies. In the end the more you know about the world of debt consolidation loans the more you can feel confident in the fast that you will not and cannot be taken for a ride. Thank you so much for allowing us to attempt to guide you into the world of debt relief and we will see you a bit later.
When you want to pay off 401k loan amounts quickly, you will need to find a way to repay the debt without damaging your credit score. Taking out a 401k loan may be necessary, but there are many disadvantages to having the loan unpaid for an extended period of time.
Why Repay Quickly?
One of the main advantages when you pay off 401k loan balances quickly is you won’t lose any principal or interest that goes into your account. Since the interest rate is lower on loans that investment into your 401k plan, you will earn less over time when you have a loan. You may also find that if you change employers while repaying the loan, the full amount becomes due immediately. If you have concerns about changing employers or you want to earn the full amount on your 401k plan, you need to begin repaying the loan as soon as possible.
Many employers allow you to pay 401k loan amounts through your salary. You will notice a small amount deducted from your salary every month to make the repayment. You may not know you can pay the loan back in less time than it takes your employer to deduct it, however. Paying your loan off quickly will allow you to earn more interest and change employers without worry.
401k loans count toward your income, so if you were contributing to your 401k plan to reduce your annual taxes, you may find the loan puts you into a higher income bracket. 401k loans are an easy way to receive money quickly, but you will always want to pay off 401k loan balances as quickly as possible to ensure financial security. You may have paid some debt off with your loan, but now you have another debt to repay.
Paying Your Debt Quickly
It is important that you begin to pay off 401k loan balances as soon as possible. You can begin to repay the loan through work, but when you want to repay the loan in less time, you will need a financial plan that will work for you in your personal situation. There are many benefits to repaying your loan quickly, but the most important is becoming debt free. Having all of your debt repaid allows you to enjoy financial freedom and plan for your future in a way that ensures you won’t rely on loans for emergencies.
It does take discipline to stick to a plan that allows you to pay off 401k loan payments quickly. The best thing to do is rely on a professionally written guide or outline to assist you in managing your finances. Your personal situation will vary, but that doesn’t mean that a professionally written plan won’t work for you. In fact, one of the best ways to pay off 401k loan amounts in less time is to rely on someone with experience in the financial world. You will find paying off your debts is one of the best things you can do to enjoy life now, and to have the financial freedom you have dreamed of.
Paying off debt–especially paying off 401k loans–doesn’t have to be complicated.
In fact, one of the easiest to follow, and simplest to understand methods is taught in our program called, “Blessings in Disguise – your debts can set you free”.
Following the method we teach in this free program will show you how your can pay off your 401k loans-and all your other debt as well-in as little as 5 to 7 years.
If your car insurance is due for renewal and you are considering buying another policy then this article will provide you with important facts that you should know about. Car insurance policies are getting increasingly expensive and you should do all that you can to reduce your costs. How much you have to pay for your car insurance is dictated by a variety of factors as they apply to you and your vehicle.
In this article we will examine coverage limits, your age, gender and marital status, your location and insuring other household members. All of these factors will have a great influence on how much you will have to pay for your policy.
Coverage limits are generally dictated by the price that you are willing to pay for your insurance. A higher level of coverage will generally result in higher premiums. The best way to find a good value policy is to comparison shop. Nowadays it is generally accepted that the best way to do this is by using a car insurance comparison website.
Your age, gender and marital status will have a great effect on the auto insurance rates that you are offered. Insurers rate drivers using a variety of criteria, if you are a young single male driver you will usually have to pay higher rates. If you are a middle-aged female married driver then your rates will be lower. Insurers calculate the best car insurance rates for you by comparing levels of risk. Those groups which are statistically more likely to be involved in an accident have to pay correspondingly higher rates.
Location plays an important part in deciding how much your premiums will cost. Drivers who live in an urban environment will usually pay more than those from a rural area. This is because drivers who live in cities and heavily populated areas are more likely to be involved in an accident, or to have their car stolen or vandalized. Insurers generally offer better rates if you’re able to demonstrate that you keep your vehicle in a garage at night. You may also be able to improve the security arrangements of your automobile by fitting an alarm, immobilizer and steering wheel lock.
Insuring other household members will have an influence on the cost of your policy and the best car insurance rates that you offered. If you have teenage family members living with you and they are added to your policy, then your costs will increase. This may still work out cheaper than if your teenage driver were to have a separate policy in their own name.
In conclusion, there are a variety of different factors which can affect your ability to be offered the best insurance rates. Some of these are coverage limits, how old you are, whether you are male or female and whether you are married or single. Your rates will also be affected by the area where you live and whether other household members are included in your policy.