Free Initial Contract (919) 627-7748 If you are going to North Carolina Bankruptcy Court or need a North Carolina Bankruptcy Attorney then you need Cameron Law. Better in most cases then the touted "credit management", "debt reduction", "debt consolidation loans", "credit repair" and, "debt settlement"; It allows a fresh start and the ability to clean up your credit. Unlike a North Carolina Bankruptcy, none of the others help your credit, and most will damage it more.
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Sub-Prime banks are called equity lenders. They often offer to "help" to keep you from filing bankruptcy by paying off and consolidating your debts. They actually steal your home. They lend at 9, 10, 11% interest or more. Some of these equity loans are at as high as 26% interest. They charge high origination, closing, and broker fees that become part of the loans. These lenders often use unfair trade practices, like flipping and packing, high appraisal values, and over-insuring to increase their income. They also charge higher points, upfront fees, prepayment penalties and charges. Predatory lenders normally don't keep the loan. Instead, predatory lenders sell it to other lenders. They lend to you based only on the equity in your home-- not your ability to repay. They intend to repossess your home in order to be repaid. They often inflate appraisals to make the loan. If you borrow from them after you file bankruptcy they will claim to you that since you filed that you have to pay higher rates. They "forget" to tell you that if you will just wait 2 years after your bankruptcy discharge and pay on time that you can save thousands and get lower rates.
If you can't pay your debts, getting a high rate second mortgage is not the answer. If you borrow from one of these predatory lenders, and you can't pay your mortgage and debts after refinancing, you will normally lose your home and still have to file bankruptcy. Never refinance while your credit is poor. You will normally go from owing on a Class A home mortgage rate at 6-7% to owing on your home at 11% and as high as 26% mortgage rates for B and C mortgages. Predatory lenders make thousands off you by promising a "solution to bankruptcy" while the lender steals your home equity with hidden packing costs, prepayment penalties, flipping, high closing costs or other fees.
Generally, a debtor whot is considering bankruptcy needs to talk to a bankruptcy attorney to see if he would lose his house in bankruptcy, and to seek proper financial advice. The average Class A lender mortgage broker will make 2% of the amount financed from refinancing your home, so a $100,000 home will have about a $2,000 broker fee. The Class B and C lenders will make 4 to 16% or more. Their fees will be from $5,000 to as much as $32,000 for refinancing a $100,000 dollar home. More expensive homes will have even higher broker costs. Refinancing while your credit is poor just makes the mortgage broker money. You must have one year or more of on-time rent or mortgage payments before you apply for a mortgage or you won't get a prime rate loan. Also your income to debt ratio must be good.
The sub-prime lenders don't care whether you make payments or not. Their goal is to steal your home's equity at loan closing and to collect it in foreclosure when the payments are not made. They target the uneducated and financially-troubled borrower. Sub-prime lenders do not advertise to sophisticated borrowers who shop for lower rates. They often advertise that it is a good idea to mortgage while your credit is poor to pay off credit cards or solve problems. One sub-prime broker once made the comment to me that if God didn't want sheep sheared he wouldn't make them sheep. Predatory lenders are an example of pure greed, and what they do is legal.
In congressional hearings, companies like the Money Store and others have been labeled as predatory lenders. The business has become so profitable that most of the sub-prime lenders are now owned by respectable prime lender banks. For instance, the Money Store was owned by First Union. (First Union refuses to be known as a predatory sub-prime lender, so it simply does its dirty business under another name.) Equicredit was owned by Nations Credit.
Often, home improvement companies will also use predatory lenders. They promise to repair your home, the bank pays for the repair, and the repairman heads for Miami . These lenders make loans knowing that the bank will eventually repossess the home and take it from you. If you have gone to one of these lenders, and the loan is properly closed, it is difficult to do much about it; you have simply given away your home.
Do not use sub-prime lenders! Your best strategy is to work only with a prime lender so that you can get a 5-6 % rate (or whatever the prime rate is at that time). Remember: If your credit isn't good and you don't have at least 12 months of on-time payments you won't be approved by a prime mortgage lender.
It may be difficult to tell if you are dealing with a prime lender or not because most sub-prime lenders try to mislead consumers. They will use names like "Equitable Mortgage" or "Respectable Mortgage" to make them look official, proper, or like other banks. They often promise you a 6% loan, but at closing it turns into 12% at the table. Prime lenders have strict lending rules and they are more likely to follow the legal guidelines. Sub-prime lenders are far more likely to make "Truth in Lending" and other errors. The Truth in Lending Act makes the loan invalid if the fees were not properly reported. Sub-prime lenders often "keep the change" if you overpay fees for credit reports or inspections, and they overcharge items and understate fees and interest.
You do have choices when it comes to getting a low rate mortgage and filing bankruptcy. First, you may be able to refinance a mortgage to a lower rate before filing bankruptcy. That might save you from having to file bankruptcy at all. If you go from a home mortgage at 10% on a $100,000 dollar home to a 6% mortgage you will reduce your monthly payment from about $1,000 dollars to $600. However you can only do this if your credit history is perfect prior to filing, you have made the last year of payments on time, and you don't have too high of a debt to income ratio. If you refinance you can use the money for expenses such as home repairs, surgery, or necessities, and then file bankruptcy after you have no excess (non-exempt) equity in your home.
However . . . If you have good or perfect credit and you want to see if you can get a prime rate mortgage, contact us and we can recommend someone that specializes in this! However, generally paying unsecured debts from your retirement or home equity is a poor idea. You can bankrupt debts like this and often keep your home equity and retirement funds. Never refinance a home to consolidate debt unless you go to a lower interest rate, or you will probably eventually lose your house. There are only a few very weak laws that protect you from these people. Period!
The other common scam you hear about in bankruptcy is that you can erase bad credit. Every year someone claims that if you give them $3,000 they can erase your bad credit. There are even laws against these businesses, but like drug dealers they get busted and then reopen shop making the same false promises in another name over and over again. You can only erase untrue items on your credit report. Anyone who knows anything about credit knows you can't erase true, negative items from your credit report or invent a new credit history without committing fraud. This is called identity theft, and you can go to prison for doing it. There's nothing a credit-repair clinic can do for you that you can't do for yourself.
You can "Protect your credit by settling your debts!" For every action there is an equal and opposite reaction, and nowhere is that more true than in the world of credit. Pay less than you owe through credit counseling, and your credit rating is trashed. Yet, many debt-settlement companies insist they can pay your debts for you by paying only 50 cents on the dollar, and that you will have good credit-- and there are always people who believe it. If you want your credit to be even worse than it would be by filing bankruptcy, go ahead. The downside of this is that you will take more years to repay their 50% repayment plan than you may have taken to repay it with a 10-20% Chapter 13 repayment plan.
. They will charge you high fees.
. The effect on your credit will be just as bad as bankruptcy.
. Some companies won't take the reduced payments and will sue you anyway.
. 90% of the people never finish these credit counseling plans that are set up.
. These debt settlement companies often only pay themselves. They pay themselves first and sometimes only pay themselves until they go out of business. That's right. Sometimes, and all too often, they never pay the credit card companies, and then they file bankruptcy themselves after telling you not to.
This is where you pay too much for a bankruptcy. It costs a lot of money to advertise, keep an office open, and pay staff. You pay for this with your attorney's fees. The attorney who has the TV ads pays astronomically for them. Yellow page advertising is incredibly expensive, too. This cost is passed on to you. Attorneys with high advertising and office costs need a high volume of clients to pay for the ads - so they use paralegals for most, if not all, the work except going to 341 meetings and court. You may never speak to the attorney you saw on TV. You end up paying more for a paralegal than you would for an attorney elsewhere. Of course, you get to sit in an expensive office while you wait for the paralegal, so enjoy it -- you're paying for it. Don't confuse TV glamour or an expensive office with competence. An attorney running a "mill" is far most interested in his bottom line than you.
This is where you get substandard service. Another type of "mill" doesn't overcharge for a bankruptcy, and may even be the least expensive. They make up for their advertising and office costs by providing poor service. Unfortunately laypeople are often in awe of the attorney with the fancy office and assume they are getting top-notch service. I have heard people sing the praises of an attorney I know to be particularly poor. They got their discharge, and they are elated, and they feel this way because they have no idea what could have happened if they went to a competent, ethical attorney. This scam, unfortunately, can be combined with Scam Number Four.
This is where an attorney takes a bankruptcy case when he is not knowledgeable in the field. "Generalist" attorneys are great for run of the mill needs, but you want to go to someone who does mostly, if not exclusively, bankruptcy. It just makes sense. A "Generalist" will not have an in-depth understanding of bankruptcy, so there is a much higher chance he could miss something - to your detriment! He will also have to spend much more time on each petition and often charge accordingly. He will also rarely have the best software, reference books, or colleagues in the field.
This is where the cost is misrepresented. Often, when asked, an attorney will quote a fair price for a bankruptcy. Then later come the additional costs. Some attorneys charge per creditor, some charge a handling fee for your court cost, some charge to review your credit report. These added costs can triple the quoted price, and if they are not spelled out upfront are unethical, in my opinion. Make sure the quote you receive is a complete quote, including court costs. A good attorney will always insist on pulling all three credit reports, which may cost as much as $40. Expect these charges, and make sure you're getting an accurate picture of what your costs will be.
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Cameron Law is a Congressionally designated and Federally mandated Debt Relief Agency who's practice includes bankruptcy.
Disclaimer (the fine print): This web site is not legal advice, and it may not be applicable to your own personal situation. An attorney-client relationship is not established by reading or interacting with this web site.
Who is Attorney Sheree Cameron (Bar #31432)?
Sheree is Licensed in ALL the Districts (Eastern, Middle, and Western Districts) of North Carolina.
If you are going through hard times, you need Cameron Law. Better in most cases than the touted "credit management", "credit reduction", "debt consolidation loans", "credit repair", and "debt settlement"; North Carolina Bankruptcy allows a fresh start and the ability to clean up your credit.