Categories
Taxes

How Long Do I Need to Keep This? – A Guide to Receipts, Statements and Financial Clutter at Home

In most homes, paper causes clutter. And it seems to mysteriously multiply by itself. But just how long do you need to keep all those receipts, bank and credit card statements and other financial papers? Below is a handy In most homes, paper causes clutter. And it seems to mysteriously multiply by itself. But just how long do you need to keep all those receipts, bank and credit card statements and other financial papers? Below is a handy reference that you can use for dealing with your home paper trail.

Toss after One Month

ATM and bank deposit/withdrawal slips

  • keep in a file folder until monthly statement received
  • reconcile with your statement to ensure that charges and payments have been properly processed
  • if for major purchase with warranty, staple receipt to the owner’s manual and file for the term of the warranty
  • if for major purchase without warranty, keep receipt if item replacement cost is higher than the deductible on your homeowner’s insurance policy
  • if for minor purchase without warranty, shred

Cash purchase receipts

  • enter into your chequebook or computer software to ensure that you are accounting for all your purchases
  • if for major purchase with warranty, staple to the owner’s manual and file for the term of the warranty
  • if for major purchase without warranty, keep receipt if item replacement cost is higher than the deductible on your homeowner’s insurance policy
  • if for minor purchase without warranty, shred

Credit card receipts

  • keep in file until monthly statement received
  • reconcile with your statement to ensure charges and payments have been properly processed
  • if for major purchase with warranty, staple to the owner’s manual and file for the term of the warranty
  • if for major purchase without warranty, keep receipt if item replacement cost is higher than the deductible on your homeowner’s insurance policy
  • if for minor purchase without warranty, shred

Toss after One Calendar Year

  • Bank/Financial Institution monthly statements (unless needed for home business)
  • Brokerage/Mutual Fund Statements (Monthly/Quarterly)
    • reconcile with your annual statement
  • Credit card monthly statements
  • Credit reports

    • you should request your credit report annually to ensure that all information is accurate and up-to-date, especially with regard to accounts you have closed in the course of the year
    • requesting this file annually helps to prevent identity theft, so you can see who has requested the report and for what purpose
  • Monthly Mortgage Statements

    • reconcile with your annual statement
  • Pay stubs

    • shred after reconciling with your W-2 or 1099 (US) or T4 (Canada)
  • Telephone/Utility bills

Keep for 7-10 Years

  • Any T4 Forms – including T4E, etc. (Canada)
  • Annual Mortgage Statements
  • Supporting documentation (cancelled cheques/receipts/statements) for tax returns including but not limited to:
    • donations
    • retirement account contributions
    • child care receipts
    • alimony/child support paid or received
    • medical expenses
    • mortgage interest
    • property tax payments
  • W-2 or 1099 Forms (US)
  • Year End statements from Credit cards (if provided)
  • Year End statements from utility companies (if provided)

Keep Indefinitely

  • Adoption Records
  • Auto/Home/Life Insurance policy information
    • keep purchase records for as long as policy is in force
  • Automobile Records (ownership certificate/registration)

    • keep for as long as you own your vehicle
    • if annual registration required, keep only current registration paper
  • Birth Certificates
  • Business Income Tax returns, and supporting documentation, if self-employed
  • Death Certificate
  • Divorce Agreement/Child Custody Court Orders
  • Investment records clearly showing beneficiary information

    • purchase records
    • sales records
  • Marriage Certificate
  • Medical records
  • Immunization records to children
  • Military service records
  • Pension Plan records
  • Receipts for major home improvements/renovations
  • Receipts for major purchases that have long life expectancy (refrigerator, stove, freezer, vehicles)
  • Religious records
  • School/Education records
  • Tax Returns

    • In the US, the IRS has 3 years to from the date you file your tax return to examine your return for errors and up to 6 years to audit your return if they suspect that you have underreported your gross income by 25% or more. There is no statute of limitations on an audit when deliberate fraud is suspected.
    • In Canada, CRA advises you to keep your tax returns, Notices of Assessment, and all supporting documentation for 6 years from the date of filing your personal income tax return.
    • NOTE~I recommend keeping these indefinitely because they take up little space and can often be a valuable resource if there is any dispute over such things as income tax paid, child support/alimony paid or received and pension plan benefits.
  • Will and/or Power of Attorney

    • should be kept securely in a fire-proof home safe or safety deposit box at your financial institution
  • Year End Investment account summaries

Now what?

Now that you know what to keep, where are you supposed to put it all?

Set up a simple home filing system to cover the basics, and invest in a couple of sturdy cardboard or plastic filing boxes for the information you should keep log-term or indefinitely.

And a final caution – when you decide that you no longer need to keep certain documents, make sure you shred them and DO NOT put them in the general trash or recycling. Sensitive financial information or personal information should always be DESTROYED to avoid any chance of identity theft that could lead to headaches greater than you can imagine.

Categories
Taxes

How Taxes Might Be Affected By Long Term Care Benefits

Long term care insurance policies offer a great deal of benefits that are exempted from federal taxation and most state income taxes. Premiums paid on the policies are treated like health insurance premiums, so they qualify for federal income tax deductions. However, there are limits based on age.

The federal government’s tax deductible limits are based on total annual premiums paid and the age of the policyholder. For people age 40 and under, the maximum annual deduction on long term care insurance is $360 for 2013. Those aged 41 through 50 have a maximum annual deduction of $680 while people from age 51 through 60 have a maximum deduction of $1,360. The deduction for people from age 61 through 70 is $3,640 while those over age 70 have a current maximum deduction of $4,550.

The tax-exempt status on premiums paid for long term care policies is different from those paid for life insurance plans. Life insurance premiums often times only are tax exempt when the benefits paid out from them qualify for income taxation. If a life insurance plan qualifies for tax exempt status when paying premiums, the benefits typically are taxed by the federal government and some state governments as income.

To qualify for federal income tax breaks and most state income tax breaks, a long term care insurance policy must be guaranteed renewable and not grow cash value over time. Such policies are underwritten by life insurance companies. The federal government currently does not tax benefits paying no more than $320 per day. Amounts above $320 might be taxed as income, but the amount is adjusted each year to account for inflation.

Generally, daily benefits that exceed the current $320 federal limit but do not exceed the daily cost of extended care will not be taxed due to the fact they are spent on care instead of amounting to additional income. Total insurance benefits are reported to the federal government by life insurers, who issue 1099 tax forms to policyholders. Policyholders then must claim any taxable amounts on a federal Form 8853.

The benefits can be exhausted quickly when looking at the average cost of care. A semi-private nursing home charged an average rate of more than $220 per day in 2012, which is equal to more than $80,000 per year and easily could exceed even the best year of earnings for most people during their working careers. An assisted-living facility is more affordable at about $44,000 per year in costs with other services costing more. Home health care costs ran about $21 per hour in 2012, making in-home care the most affordable of long term care services.

Categories
Advertising

Advertising Is Dead. Long Live PR

Although I still believe there is a place for advertising as a brand maintenance or brand affirmation tool, I am convinced that to build a brand today, you need PR. At one time advertising did build brands. But this was in a simpler America. That America, sadly, is no more.

I've been re-reading The Fall Of Advertising & The Rise Of PR, by Al and Laura Ries, and it is their book that has moved me from suspicion of advertising's demise as a brand-builder to conviction.

As the Ries' say, "Publicity is the nail, advertising is the hammer." What does this mean? It means that your PR effort helps make your message believable so that your advertising will have credibility when it hits.

Typically, companies want to hit the market hard and make a lot of noise. Advertising allows you to launch quickly, control the message, and have your message in as many media as you have the money for. However, that does not mean your message will be believed. The louder advertisers yell, the less likely I am to believe them. How about you?

PR takes time and does not necessarily work on your schedule. Planting new ideas or changing minds is a slow process. When your PR program rolls out over a longer period of time, prospects have time to adjust their attitudes. Brands that take this approach are longer lasting, too.

Chevrolet, for years the number one auto brand, was still number one in ad spending in 2001. It spent $ 819 million dollars – 39 percent more than Ford spent. That year, Ford outsoldevrolet by 33 percent. Since 1997, Chevrolet has outspent and undersold Ford. Chevrolet spends $ 314 per vehicle and Ford spends $ 170 per vehicle. Do you think advertising is working for Chevrolet?

Kmart, embroiled in financial difficulty for years, had revenues of $ 37 billion and spent $ 542 million on US advertising in 2001. Wal-Mart spent $ 498 million and garnered four times the revenue: $ 159 billion split between its Wal-Mart and Sam's Club stores. The average Wal-Mart store does $ 46 million in sales each year while its Sam's Club average store sells $ 56 million. Sam's Club does almost no advertising.

Those are old brands, you're saying. What about some newer brands, Harry?

OK, let's look at Pets.com. Remember the dog sock puppet that starred in their commercials? It won awards, but not sales. In six months Pets.com had $ 22 million in revenues and spent four times that much on advertising. Off-base advertising creativity at work.

The Body Shop was built totally by publicity. No advertising at all. Starbucks, until recently, did virtually no advertising. It has built a brand through good PR efforts. Starbucks' annual sales are around $ 1.3 billion, while advertising expenditures over 10 years, have totaled less than $ 10 million.

Finally, what advertising agency do you know that has built its brand with ads? Things that make you go "hmm."

Categories
Insurance

ARP Long Term Care Insurance Policies

ARP is the leading non-profit membership organization for people fifty years old and older in the United States. According to ARP, the best type of long term care (LTC) insurance policy, which may cost you thousands of dollars a year based on your age and your health status when you apply for it, is one which:

* It is clearly explained when you will be eligible for coverage
* It is clearly explained just how your eligibility for claims will be determined
* Requites no hospitalization time to make you eligible to start receiving benefits
* Will be automatically renewed for as long as you pay the premiums, and will allow you to stop paying premiums once benefit payout begins.
* Has one "reasonable" elimination period (like a deductible; ARP defines "reasonable" as 90 days) for the life of the policy (having an elimination period keeps your premiums lower)
* Definitely covers pre-existing conditions that were disclosed when you applied
* Gives you options for inflation protection
* Permits you to downgrade your coverage if you can't afford the premiums on your current level of coverage
* Will cover Dementia
* Will pay for not less than one year of nursing care and home health care services
* Gives you the right of recision with no questions asked for a full premium refund during the first 30 days that you have the policy

ARP provides LTC policies which are underwritten by the Metropolitan Life Insurance Company (MetLife). These are considered to be some of the best LTC policies in the business, as MetLife agents are highly trained and MetLife has superior assets and claims paying strength. ARP advises people who are interested in buying the best long-term care insurance policies consult either a professional and licensed insurance agent or a financial planner. If these professionals don't advise you, you run the risk of being tempted into not including some of the most important features such as those listed above because the sales agent will try to sell you on lower premiums. Lowering your premiums at the expense of any of these most important features is not worth it.

ARP has now also entered into a relationship with Genworth to provide a portfolio of long-term care coverage with limited features and benefits. These are group plans that offer coverage for significantly lower premiums. ARP group plans for LTC have fewer options than an individual plan would. The prominent features of these group plans include:

* Either a 3 or a 5 year benefit period (benefit multiplier).
* A three-year plan will only pay out 75% of your total benefit to cover home care costs.
* A 90 day elimination period for all care: this means that on average you'd have to pay approximately $ 18,000 out of your own assets and / or savings before your benefits would kick in.
* No survivorship benefit option. On individual LTC policies this is an option that states that if both spouses have a policy through ARP for 10 years and neither one has a claim during that time and one spouse dies, the surviving spouse keeps their LTC policy without having to pay any more premiums .

While this new ARP / Genworth group LTC plan may be right for some people who think they would like their long-term care insurance to have lower premiums, the limitations in features and benefits could make these policies more expensive in the long run if a policy holder needs to make a claim. It's always vitally important to remember that especially when it comes to long-term care insurance you get what you pay for. Higher premiums (with respect to your age and health status) now means greater benefits later on should you ever need to make a claim against the policy.

Categories
Unsecured Loans

Unsecured Loans – A Little Money Goes a Long Way

Unsecured loan or cash advance is a small loan which you can take any time. It is one of the two most popular options for short-term lending that people can avail of, the other one being payday loans. You don't need a credit worthiness tag to apply for an unsecured loan. Your bank will advance you the cash or a lending agency will, sometimes on the with a guarantor standing on your behalf in case of default. Such loans are repaid in monthly instalments.

They carry very high interest rates, especially payday loans. Unsecured loans are not so bad, with APR less than 50%. The amount lent varies from lender to lender, but doesn't go more than a few thousand pounds. Unsecured loans are the last to be repaid, only after any other charges on the account are paid. Unsecured loans are not secured by any asset like a home or car. It is based on the assessment of a panel of lenders who will help you to find the best loan for your requirement. Companies offer a range of loans like this, secured or unsecured, depending on your requirement.

Different lenders charge different APRs, which they must display on their advertisements as representative APRs, which include all other charges with the interest amount. They charge differently based on customer profiles, their credit rating and the lender's policy of course. Hence APRs can range from single digits to the 90s.

Some FAQs on Unsecured Loans …

Can I face legal action if I do not repay a loan?

Unsecured loans are perfectly legal and you can face legal action if you don't repay, even though there are no guarantors or assets linked to your loan

What are the advantages and disadvantages of unsecured loans?

The advantages are that they are easy to get should you need a large amount of cash in a hurry. There are no questions asked and payment terms are flexible from one to five years. There is no pre-payment penalty, and some loans give a repayment holiday period for the first few months after the loan is taken.

The main disadvantage is that it is an expensive loan to pay back.

Who is the best candidate for an unsecured loan?

Though it is not considered a critical factor, a good credit history makes for a good candidate for unsecured loans. If it is a bank providing this loan, an account holder is a good candidate. A longtime resident of the place with a secure job is also a good candidate. So while granting the loans, the lenders consider those candidates as best candidates who can repay their loans in a short period of time because of their secure job and impeccable credit history.

Is the interest (APR) flexible? How is it calculated?

The interest rate on an unsecured loan is calculated depending on the following factors:

1. The amount borrowed – the interest rate is inversely proportional to the amount borrowed usually. If large amount is taken as loan, then the interest rate will be less while the interest rate will be high for a small amount of loan

2. The term of the loan – long term loans have higher rates while short term loans which can be repaid within a short period of time has low rates of interest

3. The borrower's credit history – a good credit history will get you lower rates. But if your credit history is not impeccable or you had defaulted in past then you will have to pay high rates of interest.

What is the maximum term for such loans?

The maximum term of unsecured loans is usually five years.

Categories
Wealth Building

Wealth Building 101 – For the Long Term

Whenever we read about building wealth or even attend a seminar for that purpose, we usually start by assessing our present financial status. When Building Wealth by Russ Whitney was first released in 1994, it was hailed as a cutting-edge, comprehensive book that offered a step-by-step plan to reach financial independence and build long-term wealth.

With a successful wealth building strategy comes the understanding of what kinds of diversification offer you the protection you need from taking great losses in the short and long term. As far as courage goes when it comes to wealth building, many people tend to be like the cowardly lion from the Wizard of Oz.

Most of the people I talked to have college degrees, but they didn't know the basics of wealth creation. Sure, you could fail and that's what stops most people succeeding, but if you have the right method and the right attitude, you can win in building wealth. Once you have set the goals for your wealth building, the next step of financial planning is to lay down a feasible and precise plan.

They say "If you can't defend you won't win no matter how good your attack is" and it's the same in creating wealth. The first and utmost important thing for wealth building is that you have to have a big enough nest egg to grow your money no matter what strategies you use – real estate investing or stock market investment. The key is to maintain a will do mindset, use what you've got that may have more value to others, and find inspiring ways to have other people invest in your wealth building program.

The key ingredient that separates winners from losers is discipline and playing the odds at the right time, if you adopt the mindset to succeed, have confidence and are prepared to take calculated risks you can win in what is probably the most lucrative of all ways to build wealth fast. To build wealth you need to balance the risk reward and aim for the highest reward, with low downside risk.

Land in the right location tends to appreciate at a strong upward rate, with very low downside risk and tends to have far better risk reward for example than mutual funds. Its not just the upside potential it's the fact that it tends to lack downside risk. When you invest you want to compound your money and make your money do the work of making more money and this means not aiming for the biggest growth but the best growth you can with low downside risk.

Consider this, if you make 100% on 5,000 you have $ 10,000 but do the same again and you have $ 20,000 and this exponential growth can build huge money in time. Building wealth means finding out what you can do, and what you can do to make money with the skills that you have. Financial growth involves the ownership of multiple money producing assets that flow to you, not money draining assets that flow from you.

One of the least utilized techniques for building wealth is to set aside money in separate accounts.Another important aspect of building wealth is to know what to do when the money does start to come in. If you are unsure of where to start and feel like you just aren't cut out for wealth building, there are programs that will instruct you further.

Once you have a goal, created a plan, and disciplined to execute the plan, the strategies and the techniques you learned from wealth building seminars or real estate investment seminars would take the course of your wealth building further.

Categories
Stocks

Forex Day Trading – Why Day Traders NEVER Win Long Term

If you are new to Forex trading you may consider day trading but beware of the fact that day traders ALWAYS lose for the following reason:

All short-term price volatility is random

There are countless millions of traders each day that trade trillions of dollars worth of currency and to say that you can measure what they will do in a few hours or a day is the biggest myth of currency trading.

THE PROOF

You may say that you have seen forex trading systems that claim profits and what they do is claim and NEVER produce a real track record.

You normally get the following:

1. Outrageous Claims

Advertising copy pure and simple, with no substantiation – designed to appeal to the greed and naivety of the buyer.

2. A Hypothetical Track Record

Let me explain what this is, for those of you who don't know:

It's a hypothetical track record done in hindsight KNOWING the closing prices! How hard is that?

Anyone can do it and there not worth the paper they're written on. The fact so many traders don't question them or don't ask for a real track record, means they lose and wonder why.

Anyone can make money knowing the closing prices but in Forex Trading you don't get that luxury – its what makes forex trading so hard.

The reason you don't get a real time day trading track record is simple – day trading DOESN'T work.

If it did you would see a day trader with a real track record but of course if you try and find one you're in for a long search.

Day Traders don't make money – PERIOD.

If you want to make money with forex technical analysis you need to trade in time frames where the data can help you get the odds on your side and this means normally data of a few weeks minimum, not a few hours.

Think about it – if you have random volatility that can and do take prices anywhere in a day, its impossible to apply any technical tools to it. The tools maybe good but the data is unreliable and that's why day traders lose.

The proof is a real time track record and you wont get one in day trading – try asking one of the vendors who try and sell day trading systems for one and get ready for a long search.

Day trading does not work and never has and it's one of the biggest myths of trading that forex traders fall for – dont fall into the trap or you will lose to.

Categories
Stocks

Day Trading Versus Long Term Trading – Find Out Which Wins

Trends rule in the Forex market. Every trader loves a good, strong trend. As traders, many of us like to make quick profits. Who doesn’t? The problem is that by just focusing on making quick profits, we often overlook a much more profitable strategy which is the long-term trend.

First let’s discuss the anatomy of a short-term trade. A short term trade can last anywhere from less than a minute to about 20 minutes, if you get really lucky. A 20 minute trade should return huge profits. Those are the uncommon trades and the 1 to 5 minute trade are more common when day trading. As a trader, you must make a split second decision of whether to enter a short term trade.

A savvy trader will set both exit points, profit and stop-loss, when entering a short term trade. Most traders, however, set a stop loss, but don’t set a goal for their profit leaving the exit at their discretion and, often, to luck. If you do short term trading, set your exit points before entering the trade. You can always adjust them as the trade progresses, but you will be protecting yourself against sudden reversals and changes of market sentiment.

Long-term trading in Forex is often overlooked and even frowned upon by many traders. For one reason or another the belief among most Forex traders is that most money is made scalping the market and that holding positions overnight is not a good strategy. Well… That assumption is wrong. The Forex market is very much like the stock market in that aspect and those that trade the long term charts, whether you use a day or weekly chart, have a better chance of making unbelievable gains.

The reason for it is that, except for exceptional events, currencies make their big gains and losses over longer periods of time and not in a 30 minute time span. If you take a look at the long chart of any currency pair, you will see that, had you traded the long term chart, you would maximize your profits. That is because instead of just making small one day gains on a currency that is trending, you would ride the trend for several days, weeks, and, sometimes, even months. I ask, where do you see the opportunity for bigger profits?

I agree, the long term chart offers a better chance to maximize your profits, but it takes discipline and reconditioning your mindset to stay in a trade for a much longer period of time.

Categories
Ethics

Law of Attraction – Ethics and Long Term Disability

Just on CNN.com to day was an article on “The Secret,” the book that has taken the world (literally) by storm outlining what has commonly become known as The Law of Attraction. While there is nothing new about this “Law” – it’s been written about for decades – what is new is the presentation and the popularity in our culture.

So what’s really at issue? Let’s look an example. Not long ago I heard a lady expressing how “The Secret” had changed her perspective – how she was going to use the law of attraction to change her health and wealth. She was pumped and full of enthusiasm. Seems she had been ill for some time and felt that through using “The Secret,” she could attract the funds she needed to seek some desperately needed medical help. On the surface everything seemed reasonable. You attract to you what you seek or what you hold in consciousness. Therefore ask and you will receive, a fundamental tenant of “The Secret” or “the Law of Attraction,” should yield the results that you seek.

“Should” – but here’s there’s more to the story. Seems the person seeking funding for medical care is on long-term disability. There is no doubt that the individual is ill and needs medical attention. But as Paul Harvey would say – here’s the rest of the story. The person in question contracted her illness 20+ years ago. That was not revealed to the company through whom she has long-term disability. In her words, “has they known when I got sick, it would have been considered a pre-existing condition and I would not have received my disability benefit. So I never talk about those early days.”

Wow…my first thought was here was someone who knew that perhaps they wouldn’t qualify for a benefit, but was willing to play the system for personal gain. Would they willing to be honest and accept the consequences? Again, let me make it clear – I don’t doubt the illness – I’m concerned about the ethics of taking what may not be rightly theirs. But the story goes deeper.

While on long-term disability the individual in question found out that the insurance company had her under investigation. It seems that insurance companies are quick to investigate in order to avoid fraudulent claims or payouts. Do insurance companies use ethical tactics in order to find out the truth? Probably not – however, there have been many documented claims of disability when, in fact, it was not 100% true. Does this justify unethical investigational tactics? No, but one could see how that could apply when the rest of the story is revealed.

Let’s take it a bit further. A person who has 100% disability prepares for a trip to a large city in anticipation of a major performance at a world renowned venue. Wait – this is confusing, I thought folks with disabilities – especially 100% were, well let’s say, challenged with strenuous effort. I agree. But let’s look at the facts – packing suit cases, traveling to the airport, boarding a plane, going to the hotel, practicing for hours (in anticipation of the performance), standing for hours (before and during the performance) and then attending a celebration meeting following. Doesn’t sound like someone who is totally disabled.

But there’s more. How did this go undetected by the insurance company? Good question. One suitcase was wrapped up like a gift so that it would not appear suspicious as it was taken out of the dwelling. And, upon return, the disabled individual exited (not at her dwelling), but a ways away – so that she could move behind the building – jump a fence – and sneak in the back door so that anyone watching would not know that she returned. And what about the suitcases. She had them taken to another location so that she could unpack them a little at a time – carrying the contents in grocery bags – again to fool any insurance investigator who might be looking.

“I don’t want them to know I’ve been away. Otherwise, they would follow me and use the trip against me in their attempt to deny my claim,” stated the individual. It appears that the insurance company would contend that she could do some work – and while that might be true – she sure didn’t want to let them know that.

While I will say, yet again, that I don’t doubt her illness – I am amazed at the lack of ethics and integrity involved in trying to dupe the insurance company – thereby, enabling the ability to gain financial benefit.

But what does this have to do with the “Law of Attraction?” There are many “laws” that we live under and through which govern our world as it operates daily. There’s the “law of gravity.” We can’t deny that. Likewise, there is another law – some know it as “You reap what you sow,” or the “law of cause and effect.” Either way, as a motivation speaker, I find that I am called up to speak to groups about the application of this law – as I have lived through both the consequences and benefits of it’s application. I speak first hand on Choices: Negative Consequences – Positive Results a keynote speech that outlines the power we have as individuals based on the choices we make. Further, the presentation, Make It Happen is a keynote presentation outlining the practical application of the “Law of Attraction.”

What seems true is that the laws we speak of work only if they are congruent with other universal laws. For example, the “law of attraction” will not reward someone financially if they rob a bank, as that is in congruent with the “law of cause and effect,” which will generate a negative consequence for the robbery – prison. Similarly, one will not be rewarded with positive results long term through lying.

We do reap what we sow and, generally, on a universal level we have in our lives what we attract to us. In this case (I may be proved wrong – but I don’t think so), I doubt that the universe, through the “Law of Attraction” will provide the necessary funding for the medical care this person seeks – since such attraction would be in congruent with other universal laws. Dishonesty, unethical behavior, or lack of integrity, all combined will produce an outcome that is less than this persons best.

As a motivational speaker who speaks on the “Law of Attraction” as well as the “Law of Cause and Effect,” I feel compelled to share with this individual the truth about the application of these laws. Yet, after several conversations – I’m quite convinced the message won’t be heard. So often we get so caught up in our web of deceit that we can’t see the truth – even when it’s in front of us. More importantly, we may not be willing to accept the consequences of changing our behavior – and at that point, the consequences – when they appear – will be more dramatic than we might ever anticipate. Insurance fraud is punishable by prison – which is not the outcome being sought.

Categories
Mortgage

Foreclosure – How Long Before I Lose My House?

Many homeowners have questions about how foreclosure works and how long they have between when they miss a payment and when the bank actually forecloses. If you’re wondering how long you have before you have to leave, it depends on whether your case will be handled in a judicial foreclosure or in a non-judicial foreclosure. Most states allow both, but some states only allow one or the other, so you’ll have to research to find out which your is for sure, but there’s a good chance yours will be non-judicial because it moves faster and costs less for the lender.

All Foreclosures

– You miss your first payment (for example, we’ll say this is your July payment and it was due on July 1).

– Your grace period expires (usually 15 days) and you haven’t paid. Your payment is now considered late by your lender. It’s not uncommon to begin getting letters or phone calls from them at this point. Don’t ignore these phone calls.

– At most lenders, once you’re 60 days late (September 2 in our case), your loan is considered in default and the lender can begin either the Judicial or Non-Judicial foreclosure process. To bring your loan current at this point, you’ll usually be required to pay all past due amounts (your July and August payments), all late fees, and your September payment.

This is where lenders have the most flexibility in the process. They aren’t required to enter the foreclosure process simply because you’ve fallen a certain number of days behind. If you’re in communication with them and have worked out a plan to get back current, you can stay out of foreclosure altogether, but you have to take action.

Judicial Foreclosures

– Your lender’s lawyer will file a complaint with your county courthouse and request a court date. This typically doesn’t happen until you’re over 90 days late.

– You’ll be served a notice of this complaint.

– A hearing will be held in your county to determine the sufficiency of the complaint. If you believe you have legal grounds to dispute the foreclosure, this is where you and your lawyer would argue those grounds. At the end of this hearing, the judge will rule whether the complaint is sufficient or not. If it is, the foreclosure sale will be scheduled and your credit record will be marked as having a foreclosure. If it’s not sufficient, the judge will dismiss it. How long all of this takes is dependent upon the courts in your area. Typically, it takes about 30 – 60 days.

– A date will be set for redemption of the property if your state laws stipulate. You can still bring your loan current (including fees, etc) until the redemption date. Even if the house has been sold and someone has moved in, if the redemption date hasn’t passed, you can still get your house back…if you can get enough money.

– A date will be set for the foreclosure auction. This usually happens about 30 – 45 days after the sufficiency hearing.

*** A Judicial foreclosure typically takes anywhere from 6 months to 2 years from start to finish. ***

Non-Judicial Foreclosures

– Your lender will send you a Notice of Default in the mail.

– Your lender will send you a Notice of Sale to tell you when your home will be sold at the foreclosure auction.

*** A Non-Judicial foreclosure typically takes anywhere from 1 month to 1 year to complete. ***

All Foreclosures

– The foreclosure sale happens and your house is sold. In approximately 90 – 95% of cases, the owner of your first mortgage wins the auction because they bid the amount that you owe on that loan and usually no one else will go higher than that.

The owner of your home then contacts the county sheriff who posts a notice of eviction on your door. This notice gives you 24 – 72 hours to leave the house and have all of your possessions out. If you’re there when the sheriff returns, he will escort of off the premises and anything left on or in the property will then belong to the new homeowner.