![]() People fail to file tax returns for a variety of reasons — personal or business problems; feelings of hopelessness or fear due to an extended period of nonfiling; anti-government sentiments; or beliefs that the penalty will not outweigh the expense and trouble of filing. Because the U.S. tax system is based on taxpayers willingly honoring their obligations, the Internal Revenue Service (IRS) does what it can to encourage nonfilers to voluntarily come forward after a period of not paying taxes. Part of this strategy includes taking a voluntary disclosure into consideration when determining whether to criminally prosecute, negotiating payment installment plans, and reducing tax liability for certain needy individuals. Whatever your reason for not filing, you may want to consider the following information in order to be prepared for actions that may be taken against you. Knowingly declining to file a tax return, or refusal to pay what is owed after filing a return, can be a criminal violation of the law commonly referred to as “tax evasion.” You may have heard about notorious gangsters like Al Capone being convicted of tax evasion, which is often used against those who operate illegal enterprises. But anyone who refuses to file a tax return or pay taxes may be charged with this serious crime. Failure to pay taxes or file a return is itself a crime. However, the IRS would rather work with you and reach a settlement before seeking criminal charges. If you derive your income from illegal sources, it is more likely that the IRS will recommend prosecution (and further investigation into illegally obtained income could also result in fraud or racketeering charges). The more blatantly fraudulent your behavior has been, the more likely the IRS is to prosecute you. For example, you would likely be prosecuted for failing to file returns year after year, despite repeated contacts by the IRS. In order to convict you of a tax crime, the IRS does not have to prove the exact amount you owe. But such charges most often come after the agency conducts an audit of your income and financial situation. Sometimes they’re filed after a tax collector detects evasion or fraud. In any event; if the IRS suspects criminal nonpayment (or underpayment) of taxes, it will start with a “primary investigation” to determine whether criminal charges should indeed be filed. If the case progresses, the IRS will initiatiate a “subject criminal investigation.” The special agent in charge of a particular investigation will work closely with IRS legal counsel to ensure it’s following protocol and properly identifying the legal issues involved. Finally, the IRS will refer the case to the Justice Department’s Tax Division. What to Expect if You Don’t Pay Your Taxes: Non-Criminal Actions If you do owe taxes, you can probably work out an installment plan to pay off your debt. You also may be able to negotiate a settlement with the IRS, depending on your ability to pay, that will significantly diminish your overall tax debt. In some cases, the IRS may owe you money. Tax Lawyer Free ConsultationWhen you need legal help with tax law, please call Ascent Law for your free tax law consultation (801) 676-5506. We want to help you.
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506 via Michael Anderson https://www.ascentlawfirm.com/what-happens-if-you-dont-pay-taxes/
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![]() There are many copyrighted works out there that can help teachers and students in the classroom, but it doesn’t make sense for most teachers and students to buy licenses for works that might just demonstrate an idea or back up an assertion on a term paper. Using copyrighted material in school can be a tricky. Thankfully, the fair use doctrine contained in the Copyright Act can give teachers and students a break when it comes to the educational use of works protected by copyright. Teachers and students can use or reproduce portions of a copyrighted work for free under certain circumstances if the work is used as part of a student’s education. On the other hand, student, teachers, and educational institutions must pay for works when their use goes beyond what is considered fair. Thus, it is important for institutions to educate their students and faculty about what constitutes fair use and when compensation to copyright holders is required. Fair Use Law at SchoolCopyright protects works from unauthorized copying, performance or display. This protection provides an incentive for creators to continue to produce works since they know that they will have the sole rights to use or market their work. In certain situations, however, the Copyright Act recognizes that it is in the public’s best interest to allow for the use of a work without compensation to the copyright holder. Quoting a small passage from a novel in the middle of a book report constitutes one such fair use, for example. There is no exhaustive list of fair uses, and whether or not a use is fair depends on the circumstances surrounding the use. There are four factors that courts will consider when determining whether a use is fair: Four Factors of Fair UseExamining those four factors, students and teachers can get a sense of when it is permissible to use works under copyright in their education. Students and teachers learn by using a wide variety of media: books, internet articles, videos, sheet music — you name it. Different types of media may have different rules associated with them. For video in particular, a committee established a set of guidelines to help educators and students determine when, why and how they could make copies of broadcasts for the purposes of education. If educators deviate from these guidelines, their use may still be fair, but it’s a good idea to stick to the guidelines just to be safe. Free Consultation with a Utah Trademark LawyerIf you are here, you probably have a trademark issue you need help with, call Ascent Law for your free intellectual property law consultation (801) 676-5506. We want to help you.
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506 via Michael Anderson https://www.ascentlawfirm.com/copyrighted-material-at-school/ ![]() Consumer credit law is a vast subject. There are several different state and federal laws apply to credit transactions with consumers. If your company extends credit to consumers, you must comply with these laws. If you are a consumer, the businesses you work with must abide by these laws. Check with our office regarding these laws prior to extending credit to consumers, and about any state laws that may apply, such as usury laws. Usury laws set limits on the rate of interest that you may be able to charge a consumer. Some also limit late charges and other fees. The Credit Practices Rule – The Credit Practices Rule applies to consumer credit contracts offered by finance companies and retailers for any personal purpose except to buy real estate. It prohibits creditors from including certain provisions (such as wage assignments and waivers of exemption) in consumer credit contracts, and requires a written notice to consumers before they co-sign obligations for others. The Equal Credit Opportunity Act – The Equal Credit Opportunity Act prohibits credit discrimination on the basis of race, color, religion, national origin, age, sex, or marital status. A business considering whether to extend credit is free to consider the usual factors in granting credit, like the applicant’s financial status and credit record. The Fair Credit Billing Act. The Fair Credit Billing Act generally applies only to billing errors related to “open-end” credit. Examples of billing errors are charges that list the wrong date or amount, charges for goods or services that were not delivered as agreed, math errors, failure to post payments, failure to send bills to a customer’s current address, and charges for which the customer has requested an explanation. The act requires a creditor to take certain actions when a customer claims that the creditor made a mistake in billing them. The Fair Credit Reporting Act – The Fair Credit Reporting Act protects consumers by requiring that inaccurate or obsolete credit report information be removed from a credit report. It applies to credit reporting agencies, and to businesses that supply information to credit reporting agencies and those that use consumer reports. Business owners are responsible for correcting inaccurate or incomplete information in a credit report. The Fair Debt Collection Practices Act – The Fair Debt Collection Practices Act protects consumers by prohibiting debt collectors from taking certain actions when collecting a debt. Personal, family, and household debts are covered under the act. Prohibited actions include using threats of violence or harm, using false statements, or contacting the consumer before 8:00 a. m. or after 9:00 p. m. The debt collector must also send the consumer a written notice containing the amount of the debt, the name of the creditor, and what the consumer can do if he or she believes he or she does not owe the money. The Truth in Lending Act – The Truth in Lending Act deals with the disclosure of information regarding the credit transaction. It requires anyone who regularly extends credit to consumers for personal, family, or household purposes to make certain disclosures regarding those credit terms. The disclosures include such things as the monthly finance charge, the annual percentage rate, when payments are due, when late charges are due, and the total finance charges. The disclosure requirements are very specific, and vary depending whether the credit is “closed” credit (a single or one-time extension of credit) or “open” credit (where additional extensions of credit are anticipated). Consumer Credit Lawyer Free ConsultationWhen you need legal help with a consumer credit matter, please call Ascent Law for your free consultation (801) 676-5506. We want to help you.
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
Ascent Law LLC
4.9 stars – based on 67 reviews
via Michael Anderson https://www.ascentlawfirm.com/consumer-credit-law/ ![]() As each summer approaches, the number of minors (people under 18 years of age) in the workplace skyrockets, as students who have been in school go on their summer breaks and many look for work. Hiring minors makes business sense to many companies, agricultural producers, and small businesses. Minors can be a source of boundless energy and, just as importantly, cheap labor. Before hiring employees under age 18, however, be aware that child labor is regulated by the federal Fair Labor Standards Act (FLSA) and state labor laws. If there seems to be a conflict between your state’s child labor law and the FLSA, the stricter of the two prevails. Child labor provisions are designed to protect minors by restricting the types of jobs and the number of hours they may work.
Fair Labor Standards Act or FLSAOnce a child reaches the age of 18, they are no longer minors and may work as many hours as they like, in whatever industry they choose. No one under the age of 18 may be employed in a hazardous job, though (see below). For minors age 14 or 15, hours and types of work are restricted to promote educational opportunities and to increase health and safety. Minors ages 16 and 17 are unrestricted in the number of hours they work. The minimum wage as of July 24, 2009 is $7.25 per hour. States may have their own minimum wage, however, and, if so, employees are entitled to the higher of the two. Kids ages 16 and 17There are no restrictions on the number of hours per day or days per week for teenagers ages 16 and 17. All minors are prohibited from performing hazardous jobs, however (see below). 14 and 15 year old minorsThose employees ages 14 and 15 have the most restrictions placed upon the amount and type of work in which they can participate. When school is in session, 14 and 15 year old employees can only work between the hours of 7am and 7pm (extended to 9pm from June 1 through Labor Day), and only 3 hours per day and 18 hours per week. Workers under 13 years of ageGenerally, fourteen is the minimum age of employment under the FLSA. However, there are several blanket exemptions to the FLSA allowing those under 14 years of age to work (see below). In addition, if the business or farm is operated by the parents, children of any age may work there. Remember Theses Things About the FLSAThe FLSA does not apply to young people (no matter their age) working: Minors in Hazardous JobsThe following jobs have been deemed to be hazardous by the federal government and therefore no minor may perform them. There are certain limited exemptions (explained further below), however, as a general rule, no one under the age of 18 may participate in the following occupations: There is also a parental exemption allowing children of farm operators to work in any occupation in agriculture, regardless of their age. Partial ExemptionsIn addition to the rules for hiring minors and limited exemptions outlined above, for non-agricultural jobs, the following partial exemptions also apply. Employees who drive on public roads in a job-related capacity must be at least 17 years old, have a valid driver’s license, and no moving violations on their record. Minors ages 14-17 who are excused from mandatory school attendance beyond eighth grade are allowed to be employed in businesses that use machinery to process wood products (e.g., sawmills, furniture makers, cabinet makers), but are not allowed to operate or assist in operating power-driven woodworking machinery (a prohibited job, outlined above) Agriculture JobsStemming from the fact that the United States has traditionally been a farming nation, there are more exemptions and partial exemptions for minors working in agriculture. The general rules for minor employees still apply to jobs in agriculture, there are just more exemptions and allowances PaperworkEmployers should verify the age of all minors in their employ. You should obtain an age certificate issued by the Wage and Hour division of the Department of Labor to comply with federal law. Some states may also require either the employer or the minor to obtain work permits through the state’s Department of Labor. Business Lawyer Free ConsultationWhen you need legal help about hiring minors in Utah, please call Ascent Law for your free consultation (801) 676-5506. We want to help you.
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
Ascent Law LLC
4.9 stars – based on 67 reviews
via Michael Anderson https://www.ascentlawfirm.com/hiring-minors-law/ ![]() A Deed of Trust is also called a mortgage. In Utah, you will nearly always see a “deed of trust”, but most people still call them mortgages or a mortgage. Qualifying for a mortgage is an important first step in making a home or business purchase. In fact, your ability to qualify for a loan (and the terms for which you are eligible) will decide how much house you can afford. Issues such as your interest rate and whether you can become prequalified for a mortgage loan are extremely important matters, especially for first-time buyers. Determining whether you can afford a mortgage involves a calculation which takes into account your earnings, expenses, employment (and employability), and credit history. Lenders take your credit score in particular very seriously. While it may seem complicated and unnecessary, it’s very important to know what you can afford before you even start shopping for a home. Understanding Interest Rates, Points, and Fees A combination of interest rates, mortgage points, and fees will largely determine the overall cost and monthly payments of a mortgage. By preapplying for a mortgage and thus learning about your eligibility, you will get a better handle on what you can afford before you start shopping for homes. Below is a brief description of each of these factors:
Choosing Between Mortgage Points and a Higher Interest Rate If you want to lock in a lower interest rate and have the means to pay additional cash upfront, you might want to consider purchasing what are called mortgage points. One mortgage point generally equals 1 percent of the total mortage amount. If you are applying for a $100,000 mortgage, for instance, you can lower your mortgage by $1,000 if you purchase one point. What you decide will depend on your unique situation, means, and needs. Questions to ask yourself include the following:
The Risks of Adjustable Rate Mortgages Adjustable rate mortgages (ARMs) were very popular in the years immediately prior to the 2008 financial crisis, as loans were easy to get but often had risky terms. ARM loans fell out of favor after the financial crisis, but remain an option for many. Before you sign on the dotted line, however, make sure you understand the substantial risks involved:
Deed of Trust Lawyer Free ConsultationWhen you need help with deed of trust law, please call Ascent Law for your free consultation (801) 676-5506. We want to help you.
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
Ascent Law LLC
4.9 stars – based on 67 reviews
via Michael Anderson https://www.ascentlawfirm.com/deed-of-trust-law/ ![]() An important consideration in deciding what organization form (i.e. corporation, partnership, LLC) your business will take is the type of investor the business has or is seeking. For example, a sole proprietorship that is actively seeking investment may want to reconsider how the business entity is formed. Below are some questions to consider when deciding how the makeup of your investors will influence what form of business you will create. Some businesses rely on sales to build their capital, while others must rely on investors to raise the amount of money they need to get started or to expand. One type of business that might depend on investment is a company that produces software — while it may have an excellent idea, the company cannot pay its staff of developers or market its product until it has something to sell. If a business will need a large amount of invested money, its organizers should pick an entity that will be attractive to the kind of investors that best fit its needs. This may mean forming a corporation, which represents the best opportunity for an initial public offering (IPO), a tantalizing prospect for investors. When deciding what business form to choose, a business should consider its financing needs. Investors can come from many different areas — friends and family, individuals involved in the business, the business’s suppliers or partner companies, venture capitalists, and others. Each type of investor has similar desires. For example, none of them want to be liable for the business’s debt should the venture fail. However, they also have very different needs. A partner company that is financing a venture which will be key to its own success may want some control over the business’s management. An individual working for the company may want to share the profits, but may not wish to be directly involved in the headaches of management. The business also may wish the management help of a successful and more experienced company, or it may want to limit control of its management to a few key individuals. Some business entities may even be limited by law as to who can own their shares; for example, a professional corporation’s shares may only be owned by individuals licensed to provide its type of professional services. Only corporations provide a true liability shield and can issue stock. Stock can be issued either as voting shares (which allow shareholders some control of the company) or non-voting shares. A corporation can issue just a few shares to a small number of shareholders, including investors, or it can make a public offering to the broader market of investors. Several business forms allow a company to balance its desire for financing with its desire to retain control within a select group of individuals. In a limited liability partnership (LLP), only general partners exercise management control. A corporation can issue several types of stock, both voting and non-voting. The sale of non-voting shares can prevent dilution of certain shareholders’ controlling interest. The only business form that can be publicly traded is a corporation. It is possible for a business to start in another form, then be converted to a corporation. A popular initial form for a business of this type is an LLC. While an unlimited number of members can be added to an LLC, this will eventually dilute controlling interests and can become problematic. Conversion to a corporation will allow the company to decide what types of shares it wishes to issue, and to whom. Investor Lawyer Free ConsultationWhen you need legal help with an investment issue, please call Ascent Law for your free consultation (801) 676-5506. We want to help you.
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506 via Michael Anderson https://www.ascentlawfirm.com/investor-law/ ![]() Marketing your business requires more than simply hanging your shingle. You have to gain insight into your target market, come up with a compelling company name, and protect your brand, among other considerations. Below are some of the likely stopping points you will have to make along the way to marketing a business, some decisions you will have to make, and some things you may need to consider. Thinking up a name for your company, and its product, can be more difficult than it seems. A state-wide, nation-wide, and if appropriate international search for trade names and trademarks or service marks can often relieve a headache, and potential litigation, in the future. If your proposed name or mark looks “solid,” try to reserve it with the state as soon as possible, if allowed under that state’s laws. Most states require that any business performing transactions within its boundaries be registered with the Secretary of State. This registration generally requires submission of the official corporate name of the business, its address, the names of its officers, and the name of its agent. File the registration certificate as soon as possible after reserving your trade name. If your business will use its trade name also as a trademark or service mark, you should consider filing that trademark and/or service mark with the U.S. Patent and Trademark Office (PTO). It may also be possible to register the mark on a state level. File an intent to use (ITU) application for registration if you wish to protect your corporate name for the services and goods you intend to use that name in connection with. Your ITU application must contain a verified statement that you have a bona fide and good-faith intention to use the mark on goods and/or services listed in commerce. Later, you must file an Amendment to Alleged Use (AAU) or a Statement of Use (SOU) in order for the registration of the mark to be granted. The AAU or SOU must be accompanied by example products or services which verify that the mark has actually been used in interstate or foreign commerce (a company may obtain extensions up to 36 months total in which to file an SOU if good cause is shown). Rights to a trademark/service mark arise from prior usage. So, get your product out there circulating. Remember, the names of products, the actual designs on packages, logos, or phrases used in advertising may be protected under trademark laws. Prior to running an advertisement or marketing campaign, prepare your fortresses. Research whether similar products have ever run up against difficulty for false or deceptive advertising. Perform the necessary testing and research so that when you claim that you have “The Best Deal in Town,” you know that you really do. Be ready and able to substantiate your product. Business Lawyer Free ConsultationWhen you need legal help with business marketing law, please call Ascent Law for your free consultation (801) 676-5506. We want to help you.
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506 via Michael Anderson https://www.ascentlawfirm.com/business-marketing-law/ ![]() The Internal Revenue Service (IRS) employs a number of methods to help the agency collect payment from taxpayers, ranging from friendly reminders and offers of installment plans to wage garnishment and repossession of high-dollar goods. Whatever the reason, it is always in your best interests to contact the IRS if you are unable to pay your tax bill in full. This section includes an overview of the IRS collection process, information about interest charges for late payment, a reference guide on tax penalties, a FAQ section on wage garnishment, and more. The IRS Collection ProcessIf you fail to pay the taxes you owe you will receive a bill from the IRS, which marks the beginning of the IRS collection process. This process permits certain alternative payment options and ends when your account has been satisfied. The first bill you receive will state the full amount you owe. This will include the tax debt plus penalties and interest. Monthly payments are another possibility. You should negotiate the amount of the installments with the IRS. If you don’t qualify for an installment payment plan you may still try to seek an “offer in compromise” (OIC.) An OIC is an agreement between the IRS and the taxpayer to resolve the tax liability. The IRS may be willing to settle, or compromise, your tax liability for less than full payment if you can provide compelling reasons for them to do so. Receiving a Tax Bill from the IRSReceiving a tax bill from the IRS can send you into a panic, but it is important to remain calm, read the notice carefully, and take steps to minimize the bill’s impact on your life and your financial future. If it is possible to simply pay the bill in full it is often wise to do so, even if this requires taking a loan or paying by credit card. However, where this is impossible, or you disagree with the IRS’s position, there are other points worth considering. When you feel that the bill has an error you should contact the IRS as soon as possible. The appropriate contact information should appear on the notice. Prepare a written explanation of why you think the bill is incorrect and include copies of any supporting documents. Do not send original documents unless they are specifically requested and be sure to keep copies of all written correspondence for future reference. If you choose to communicate with the IRS by phone you should keep a journal of each call, including the name and ID of the person you speak to, any relevant contact information, and note the details of your discussion. Tax Lawyer Free ConsultationWhen you have debt and tax problems, please call Ascent Law for your free consultation (801) 676-5506. We want to help you.
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
Ascent Law LLC
4.9 stars – based on 67 reviews
via Michael Anderson https://www.ascentlawfirm.com/debt-and-tax-collection/ ![]() When it comes to Elder Law, we often should ask how much experience does the firm and its practicing attorneys have in the field of elder law? At Ascent Law, we have combined experience of nearly 50 years. Some lawyers will choose to practice in several areas over the years, including bankruptcy, family law, or criminal law for example. It is always best to call our office because we will not only give you a free consultation, but we can help you in the filed of elder law. When an individual is getting older and they may have decided that they can no longer take care of themselves, there is the need for an elder law attorney. We can help you from doing a guardianship, to protecting assets, to seeing if you qualify for medicaid, conveying assets to children, finding the right nursing home or other care facility (if needed), doing the will, trust, power of attorney and health care directive, etc. We can help in all areas of the law. Perhaps you are the child of an elderly parent or grandparent that is in need of legal assistance. Poor financial decisions can devastate necessary medial or end-of-life expenses that may have been allocated several years prior to other items. To see a senior’s savings and assets deplete over time is not necessary all of the time. What should you do? You should call us for your free consultation so an elder law attorney can help you decide the best course of action. Most lawyers will explain that a minimum of ten years is a good knowledge base for any area of law; but of course, the more experience usually means that you have a more established reputation; however, this is not always the case. Sometimes, younger lawyers have have 4-5 years of experience can be really good too because they are more driven. Don’t hesitate to ask questions about elder law, the process of estates or transferring assets when you come in or call in for your free consultation. Although a litigation attorney cannot reveal the personal information of their clients, you may get a better idea as to what types of cases they generally deal with on a regular basis when you ask them about their elder law clients and cases. Remember, confidentiality is very important for lawyers. We always want to protect our clients. A lawyer practicing in elder law will know what to do. He or she will know what information they will need, as well as what programs and steps to take for you. If you have a question or concerns or if you want more options, please ask. Your input is important and should be considered in the process. Ultimately, the lawyer wants to do for you what is in your best interests. The Professionals at our office know the law, know the procedures, and know the necessary rules to take to protect you and your family both in the present as well as in the future. Working with an elder law lawyer or a firm of attorneys practicing in elder law is fun and exciting. They have new and interesting ideas often based on what others in the profession are doing all around the county. We know the tried and true and we will tell you when to stay away from tactics that either never did work or simply won’t work based on the law. Remember, all it may take is one incident in the hospital to wipe out your savings account if you don’t protect yourself correctly. One of the biggest mistakes some of those we’ve seen is when you jump to a quick decision on a big matter. Take the time to speak with a lawyer before you make the decision. Your finances, your expenses, medical savings, etc. are all important and pertinent parts of life and your plan. This is why it’s important for you to have the right lawyer on your side. Disability is also something that you need to be aware of. You are nine times more likely to become disabled than you are to die. You need to protect your assets from being depleted from long-term care. We spend out days meeting with clients, discussing their lives and families, and addressing their fears and concerns. We can help you. Through our knowledge, training, experience and imagination, we make solutions that will work for you. We fix the problems of passing assets from one generation to another as quikcly and painlessly as possible with as little tax consequence as possible as well. At the same time, we work to protect those assets from being depleted by legal fees, nursing home costs, taxes and other fees, to the extent that the law permits. Elder Law Free ConsultationWhen you need legal help with Elder Law, please call Ascent Law for your free consultation (801) 676-5506. We want to help you.
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
via Michael Anderson https://www.ascentlawfirm.com/elder-law/ ![]() When times get tough, it is no wonder that many people have to take out second mortgages on their homes, and even home equity lines of credit. We’ve seen this happen before in the “Great Recession” of 2008. Yes, some of us were practicing law before and during that financial crisis. Now, we have many tools to help homeowners that may be behind on their mortgage. One option, of course, is a bankruptcy. This may or may not be right for you. As a part of foreclosure law we want to tell you about some other options as well. With a ton of debt, making monthly payments on these loans can be quite a financial burden. Many people wonder, faced with these difficulties, how to avoid foreclosure or selling their home. In almost every situation, it is best to stay current with the first loan on your home and delay or make reduced payments on the subsequent loans. Usually only the first and second home loan providers have the ability to foreclose on your home. When you first took out the loan for your home, you probable secured the loan by giving the bank a mortgage or deed of trust on the home you bought. This relationship gives your lender a legal claim to your home. Under the terms of this arrangement, the lender has the power to enforce its legal claim on your home through foreclosure proceedings if you fail to live up to your side of the contract. In order to avoid foreclosure, you must make your payments on the loan. If the lender does foreclose on your home, your home will be sold, either at auction or through a private sale, and the proceeds of that sale will go towards the remaining amount on your mortgage. Depending upon the state you live in, the legal relationship that you have with your lender will either be in the form of a mortgage or a deed of trust. These terms are generally used interchangeably. The name of the loan is not only important for your records, but it is also important for the lenders as well. If your home is foreclosed on and sold, either through private sale or auction, the lenders are paid off in order of the seniority of their loans. This means that the lender on the first mortgage gets paid first, the lender on the second mortgage gets paid next, and so on. Depending on the value of your home, the lenders on a second or third mortgage might not get paid at all in the event of a foreclosure. Because of this system, it makes it more likely that a holder of a second or third mortgage has less incentive to initiate foreclosure proceedings because they may not get paid at all. In recent years, many banks were willing to lend money to home-buyers who did not have good credit or a sizable amount of money as a down payment. This was because of the rapid increase in home value that was seen across the nation. Banks were reasoning that, even if a home-buyer defaulted on their loan, the bank could recoup all of its losses and more by initiating foreclosure proceedings. For example – a risky home-buyer would come to a bank and ask for a loan to buy a $200,000 home. The bank would do some research and see that the property values in that area were expected to rise at a fast pace in the coming years. Even if the home buyer defaulted, the bank could be secure in its knowledge that it could foreclose on the home and reasonably expect to sell it at auction for $300,000. For a while, this strategy worked and banks were running record profits on their mortgages. However, the risk finally came back to haunt the banks when property values across the country declined sharply, with homes dropping in value by 50% or more in some areas. These decreases in home value erased much of the equity that had accrued in the real estate market during the previous years. Many people often wonder how to avoid foreclosure. Because of the recent drop in property value, homeowners who have had the value of their homes drop and are also behind in their mortgage payments are less likely to face foreclosure. This is because the banks and lenders are less likely to recoup their losses through foreclosure proceedings. Even if a bank will not pursue a foreclosure on an unsecured loan, a loan where the equity of the home is less than the amount left on the loan, it may pursue legal action in the form of a lawsuit seeking a money judgment from you. If the lender wins their lawsuit, it can take various steps to make sure you are still making payments on your mortgage. These methods can include everything from garnishing your wages to taking money directly out of your bank accounts. A money judgment could also let a lender place another lien on you home in the hopes that your home will gain in value in the future. However, the up side of these remedies is that you will likely be able to remain in your home. Lawsuits normally take a long time to go to court. During this time, you may be able to raise money, negotiate with your lender, and perhaps even settle with your bank to avoid costly litigation. Many times banks are willing to settle for less than the amount left on your mortgage in order to avoid losing money by going through the foreclosure process. Even if your home mortgage is unsecured, you should only stop making payments as a last resort. Money judgments in favor of a lender can put a major strain on your credit score, which could make getting loans in the future more difficult – if not impossible. However, if suspending payments on a subsequent mortgage means you can continue payments on your first mortgage, then it is worth considering this option as a strategy for how to avoid foreclosure. Many people become frustrated by to the process involved with determining whether a loan is unsecured or not. However, despite how complicated it may seem, finding out whether or not your loans are unsecured is an easy process. The hardest step is determining how much your home is worth. Here is an example to demonstrate this point. Assume that John’s home is worth $300,000 and John still owes $250,000 on the first mortgage to purchase the home, and $150,000 on the second mortgage. In addition, when John ran into financial problems, he took out a home equity line of credit for $30,000. John is still having financial problems and wants to figure out his new financial strategy, including mortgage he should continue to pay off. To figure out which loans of John’s are secured and which are not, he needs to take the value of his home and subtract from that the amount he still owes on his first mortgage. The first mortgage is secured because John’s home is worth more than the remaining debt on that mortgage. This means that the holder of the first mortgage may still pursue foreclosure proceedings because it would recoup all of its money. However, the holder of the second mortgage would not likely pursue foreclosure proceedings. This lender would look at the value of the home, $300,000, subtract the remaining balance on the first mortgage, $250,000, and compare that to the remaining balance on the second mortgage. When that lender sees that there would only be $50,000 remaining after the sale of the home and compares that to the $150,000 remaining on the second mortgage, the lender will not be likely to pursue foreclosure. Because part of this loan is secured ($50,000), and part of it is not, ($100,000), this is an example of a partly secured loan. The last loan, the home equity credit line, is an example of an unsecured loan. This is because there are two senior loan obligations that will exhaust the value of the home before the most junior loan is paid off. Thus, this creditor will also most likely opt out of foreclosure proceedings. Foreclosure Lawyer Free ConsultationWhen you need help to avoid or stop a foreclosure in Utah, please call Ascent Law for your free consultation (801) 676-5506. We want to help you.
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
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About MeIn 2009 I was creating marketing channels for barbie dolls in Nigeria. Spent a weekend implementing dogmas in Naples, FL. Won several awards for writing about toy trucks in Mexico. Spent 2001-2007 analyzing deodorant in Pensacola, FL. Spent 2001-2004 researching heroin in Miami, FL. Enthusiastic about writing about clip-on ties in Naples, FL. Archives
June 2019
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