April 6, 2016 § Leave a comment
Remember that case that took place so many lives ago? The one you thought was a thing of the past? Perhaps you didn’t receive the proper notices, or didn’t receive notification of a final judgment. Well, it has a nasty tendency to resurface at the most inopportune times. It’s a very unpleasant surprise when out of the blue, someone receives a Notice of Garnishment from their employer or bank.
Judgments can lie dormant for years and years and accrue interest all that time. Creditors may renew the judgment every 10 years. Imagine having to cough up $20,000.00 for a $5,000.00 judgment!
MAKE THAT JUDGMENT STAY DEAD NOT JUST DORMANT:
- Open all correspondence
- Show up to all hearings
- Obtain the final disposition from the court
- Appeal within the time allowed under the law
- Settle the judgment (reduction is often possible)
- Determine whether bankruptcy makes sense
OUT OF STATE, OUT OF MIND
Out-of-state judgment creditors sometimes wrongfully submit a garnishment request to your employer or bank. They CANNOT do this without first registering the judgment in a Texas court. You will also hear people refer to this as “domesticating the judgment”. This gives you notification that the old judgment has resurfaced and gives you a chance to handle it.
Judgment creditors CAN and DO get away with not domesticating the judgment because their actions aren’t challenged correctly (or at all). If you receive a Notice of Garnishment from your bank or employer, contact a lawyer asap. You will need professional help to put a stop to it.
NOTE: This post does not address governmental agencies who may garnish wages for child support, student loans and tax liens.
February 25, 2016 § Leave a comment
Did you enter into a contract to later feel duped? You agreed to the terms yet feel you were pressured by the other party? If you signed of your own free will, it will be difficult to claim duress. Most courts will not find coercion simply because you now regret the deal or believe the other party “pushed” you into a bargain that wasn’t in your best interest. Duress typically includes the use of threats and/or harassment.
This post is about contracts that don’t come on standard forms and applies where you have the opportunity to make modifications to the contract. We won’t address consumer contracts that are sometimes found to be contracts of adhesion e.g. leases, deeds, insurance policies, credit agreements etc.
Checklist For Your Contract
- Who? What? When? Where? This one is self-explanatory.
- Is time of the essence? If so, specify the expected delivery date(s).
- Is particular quality or materials required? Provide specifications.
- What are the due dates for payments? Specify amounts and due dates.
- What’s the break-even point? Turn a profit or bargain if desired.
- Plan for unknowns? Delays, hidden costs, third parties, change requests etc.
- What are minimum acceptable terms? Time, money, quantity, quality etc.
- Is the final agreement in writing? Clear, detailed, and signed by all parties.
If you keep a checklist like the one above, you can enter into simple contracts knowing that you’ve covered your bases. If a deal doesn’t feel right, WALK, or stick to your lowest acceptable terms!
January 28, 2016 § Leave a comment
Due to the complex structure of these real estate deals, we highly recommend that you get a lawyer to draft/review the contract documents prior to signing. As the saying goes, pay now, or pay much more later. In future posts, we will review pros and cons of each type of deal. The following are some notable distinctions among these forms of non-conventional financing:
Seller has title free and clear and is willing to hold a note for a period of time. Usually, there is a fixed number of years when installment payments are being made by Buyer. At the end of that period, a balloon payment is due. If Buyer is unable to make the balloon payment, the whole sale is forfeited and Seller may retain title as if Buyer had simply been renting.
Seller steps down and Buyer steps in to assume the loan that Seller has with the mortgage lender. Most mortgages created after 2005 are non-assumable. The few that are assumable often require a familial relationship between Buyer and Seller. Buyer often has to qualify for the loan independently although the screening process may be less stringent than the screening process for a conventional original mortgage.
Wrap / Wrap Around Mortgage
Seller has a mortgage loan to a lender. Buyer buys from Seller subject to that existing mortgage (without assuming it). Seller holds a promissory note from Buyer, which normally matures around the same time as the underlying mortgage. Usually, Seller gets monthly payments from Buyer and turns around and makes payment to Seller’s mortgage lender. Hence, the term “wrap” i.e. the seller’s note from buyer, wraps around the original note.
December 17, 2015 § Leave a comment
It’s time for the yearly check up. So, what’s in your wallet? Or more aptly, in your credit reports?
Improve Your Credit Score! As of 2015, according to FICO, the national average credit score in the U.S. is 630. Credit scores can go up to 900 and a score of 750+ is ideal. If your credit score can stand to be improved, talk to a professional that can analyze your credit reports and guide you in what actions to take to start improving your score. The credit score affects all aspects of life such as interest rates, credit limit, renting, insurance quotes, employment etc. Most credit reports have errors in them that can be fixed to boost the score.
I recently met with a top executive at Regions Bank who explained some of their financial programs to me. Their secured credit line program got my attention. Very few banks offer this program and the few that do, require a hefty initial deposit to open the account. At Regions, one can be opened for under $300! This is an excellent way to rehab credit rating because Regions reports monthly to the credit bureaus which quickly improves the score.
For more information on how to take advantage of this program, contact Bill Ownbey at 512.250.2242 William.Ownbey@regions.com
BONUS SUGGESTION: Draft or Update Your Will! The idea of a will may seem far-fetched and even a little morbid, especially when we are feeling healthy. You may say; “I am too young”; or “I don’t own any assets that can be put in a will.” You owe it to your loved ones and things get very messy and expensive when there is no will. A basic will provides for expenses, lists an executor or personal administrator, and provides for specific distribution of real and personal property. It will also appoint a guardian for minor children. You may also want to appoint a power of attorney for medical or other reasons. It always makes it easier for loved ones left behind to sort things out. Make sure to consult an attorney for more information on getting a Will drafted in 2016.
Let’s make it a good year!
October 29, 2015 § Leave a comment
What is a glass of water worth? $1? $100? It depends on whether I’m in the desert or in the city. Lawyers are often asked to quote “the price” for a case.
Most lawyers are unable to quote an absolute price since not all pieces are within the lawyer’s control – unknown facts, the client, opposing party, opposing counsel, judges, jury etc. In limited circumstances, lawyers will quote an ultimate price.
Some criteria that lawyers (and service providers) use for pricing:
- Value added (benefit gained, negative consequence avoided)
- Labor (time and effort devoted)
- Materials (document production, expert reports, court transcripts)
- Difficulty / Complexity (requires expertise)
- Speed of Delivery (time constraint imposed by client or other parties)
- Ultimate Result/Outcome (finesse, quality of work done)
Next time you’re quoted a price, weigh what each item above is worth to you. You can then be confident that you’re making the best-informed decision for you.
September 13, 2015 § Leave a comment
My house catches on fire. Firefighters arrive on the scene. I begin arguing with them as they instruct me on how to get out. Am I being reasonable? Am I overcome by panic? Know about fires so I doubt the advice?
Clients hire attorneys to provide guidance. Yet, some will constantly question, challenge, and generally resist the attorney’s advice. At best, creates a difficult relationship. At worst, the attorney is unable to work the case effectively. Continued resistance may be due to:
- Bad hiring decision.
- Personality clash that seriously impairs communication.
- Poorly managed anxiety regarding the legal matter.
- General distrust of the particular profession/ trade.
If you know more about the law than your attorney, or simply can’t bring yourself to trust the attorney, you ought to change attorneys. If there is a major personality clash, the client should fire the attorney or vice versa. Otherwise, manage any situational anxiety and unearned distrust, and avoid self-sabotage (paying someone to do a job yet refusing to let the person do the job).
August 7, 2015 § Leave a comment
Just say no. If you can avoid it, don’t. If you must, then you deserve to be fully versed on all the risks. This is one where there is barely any advantage and a lot of exposure.
- Can potentially help build your credit if payments are made timely.
- Credit profile will likely improve if the debt is successfully paid off.
- If primary borrower dies, you are still on the hook for the balance owed.
- In case of a default, you are 100% responsible for repayment.
- Late payments by primary borrower will hurt your credit.
- Non-payment by primary borrower may expose you to lawsuits/ foreclosure.
- Your debt-to-income ratio may affect your ability to obtain new credit.
- You may be unable to qualify for a second mortgage / home loan.
To sum it up, if you must co-sign, make sure it is for an amount you can afford to pay off, know the terms of the loan (especially duration), and instruct the lender to notify you of late payments.