Is a Foreclosure Better or a Short Sale?

As Utah Real Estate Lawyer, we get a lot of calls from clients who tell us that their real estate agent has recommended a short sale as an alternative to foreclosure.  The selling point is that you will avoid a foreclosure on your credit report.  Homeowners think this is a great option, but, while it sounds great, the reality isn’t as wonderful.  A short sale can lead to a number of pitfalls, short sales are not necessarily better than the dreaded foreclosure. Some common short sale traps are outlined below.

Short Sales Cost Time and Money

(1) You don’t receive any money from a short sale, yet you have to keep your home in sale ready condition: in a short sale, your lenders are agreeing to take less than what is owed.  This means that there is no equity in the home for you.  When the sale is closed, you will receive no income whatsoever.  Your real estate agent, in an effort to get the house sold, will probably ask you to spend some time and money throwing a fresh coat of paint on the walls, repair some items that are damaged, in one instance, a client of mine was asked to install a new furnace before the sale.   These are all costs that you will not recover from the sale of the home.

You Might Still Owe the Bank After a Short Sale!

(2) You may still be obligated on the debt: when the lender agrees to a short sale, the lender is only agreeing to ‘release’ their lien on the property for less than what they are owed.  It is very likely that the lender will ask you, the seller, to sign an unsecured note for the difference owed between what was received in the short sale v. what the value of the original promissory note was.  This can leave you without a home and owing thousands of dollars to the mortgage lenders!  This is particularly egregious because in many states, the first mortgage is considered to be a non-recourse mortgage.  This means that when the home is foreclosed on, the senior mortgage lender does not have the right to come after the homeowner for any deficiency balance.  This is the case in Washington State.  Second mortgages do have a right to sue for any deficiency they may have in a foreclosure in Washington State.  However, if you do a short sale, the mortgage company can essentially contract around this ‘non-recourse’ provision and make you liable for the money they didn’t recover from the sale.  This is a terrible position to be in!

Short Sales Bring With Them Tax Liability for Debt Forgiveness

(3) You may owe taxes on the amount of forgiven debt from the short sale: although there is some recent federal law that may remove your tax obligations from a short sale, you should be cautious that the amount of the forgiven loan is not reported by your mortgage company as income to you.  This would take place in the form of a 1099 tax form and you could be liable for taxes after the home has sold at short sale.  Consult with a tax attorney in your jurisdiction to learn more about this.

Short Sales are Only Slightly Better on Your Credit than Foreclosure

(4) On your credit report, a short sale doesn’t look much better than a foreclosure.  Both are big marks against you in the credit world.  While a foreclosure looks slightly worse, with the time and effort you have to put in to keep you home in sale ready condition, the potential pitfalls of owing the balance of the mortgage anyway after the short sale, as well as the potential tax consequences, it might be worth it to simply let the home go into foreclosure and walk away.  I spend a lot of time counseling debtors away from short sales.  In the final analysis, they are the ones doing all the work and getting none of the benefit.  It is easier to simply let the home go into foreclosure, file bankruptcy to deal with the debt and start over again from scratch.  When your back is against the wall, sometimes you have to be able to see the forest through the trees. A short sale is not always what you real estate agent advertises it to be.

Free Initial Consultation with a Real Estate Lawyer

When you are faced with foreclosure, 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

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Equal Rights for Fathers and Mothers

I live in the United States of America, and I’ve been a Child Custody Lawyer for long, long time, and I believe most people would agree is a country in which the equality of men and women is the greatest on earth.

The U.S.A. works vigilantly to ensure that men and women are not treated unfairly under the law because of their sex and/or gender.

Equality Problems for Moms and Dads

One of which is the treatment of parents in child custody disputes.

Everyone knows as a de facto matter that women/mothers are generally favored over men/fathers in matters of child custody awards. The reasons why can be explained briefly by this excerpt from Wikipedia on the “tender years doctrine”:

Historically, English family law gave custody of the children to the father after a divorce because the father is able to provide the child. Until the 19th century, the women had few individual rights and obligations, most being derived through their fathers or husbands. In the early nineteenth century, Caroline Norton, a prominent social reformer author, journalist, and society beauty, began to campaign for the right of women to have custody of their children. Norton, who had undergone a divorce and been deprived of her children, worked with politicians and eventually was able to convince the British Parliament to enact legislation to protect mothers’ rights, with the Custody of Infants Act 1839, which gave some discretion to the judge in a child custody case and established a presumption of maternal custody for children under the age of seven years maintaining the responsibility from financial support to their husbands.[1] In 1873 the Parliament extended the presumption of maternal custody until a child reached sixteen.[2] The doctrine spread in many states of the world because of the British Empire. By the end of the 20th century, the doctrine was abolished in most of the United States and Europe.

Equal Rights In United States

Tender years doctrine was also frequently used in the 20th century being gradually replaced towards the end of the century, in the legislation of most states, by the “best interests of the child” doctrine of custody.[3] Furthermore, several courts have held that the tender years doctrine violates the equal protection clause of the Fourteenth Amendment to the U.S. Constitution.[4]

Even though it is said that the tender years doctrine was ostensibly abrogated in most of the U.S.A., it really hasn’t been. Culturally, the pervasive belief goes something like, “Let’s face it, everyone knows that women are generally better parents than men, so it’s a safe bet that awarding custody of the kids to mom is a safe bet.” And, frankly, there is some truth underlying this belief. Women carry their children for 9 months and develop a bond with their children in the course of pregnancy and birth. Only women can nurse. Women constitute the overwhelming number of personal care providers for a couple’s children, particularly their very young children. In the animal kingdom the “mama bear” is a real thing.

But a problem arises when courts approach a child custody award with an unfounded presumption that women are better parents than men and then “determine” that the mother is the better parent primarily based upon that presumption. That’s bias. That’s sexual discrimination, pure and simple.

I don’t have rigorously up to date data, but while equal custody awards are on the upswing, the estimates are that in the U.S. mothers are awarded primary custody at least 70% of the time, fathers receive primary custody slightly more than 10% of the time, and equal custody is awarded less than 10% of the time.

If this is the way the courts treat men and women in the U.S.A., I must hypothesize that countries that care less about preventing sexual discrimination favor one sex over the other even more when it comes to making child custody awards.

Divorce and Custody

Because divorce almost invariably changes the nature of both parents’ parental roles.

Where the husband/father has (usually) been, previous to divorce, the primary breadwinner, both parents will find themselves working, and usually working full-time for their individual support. The mothers end up taking on more breadwinner responsibilities. This and other consequences of divorce compel the fathers to take on more personal child caretaking responsibilities.

Regardless, the idea that “children are better off in the care of the mother than the father” is a notion that is hardly settled by hard data. Children don’t want one of their parents to be relegated to second-class status. Where two loving and fit parents go through divorce and both are ready, willing, and able to exercise joint custody of their children, it appears to me painfully and rationally obvious that the best “parent” [singular] is both parents.

Free Consultation with Child Custody Lawyer

If you have a question about child custody question or if you need help with a child support issue, please call Ascent Law at (801) 676-5506. We will 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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Are Prenuptial Agreements a Good Idea?

The law that governs prenuptial agreements (known as “premarital agreements” in Utah) is found in the Utah Code in Title 30, Chapter 8. We will answer most questions about premarital agreements by referring to the applicable sections of the Utah Code and some Utah case law on the subject.

Should I get a Prenup?

In answering this question, as a prenup lawyer, I could give you the generic opinions that you can find in dozens of other blog postings and articles online or in the library, so I will leave you to the web or the library to find those.  As to my personal opinion:

For most people (especially young people marrying for the first (and hopefully the only) time, I don’t feel that prenuptial agreements are a good idea.  The very fact that the question (of whether prenuptial agreements are a good idea) is asked implies that people have their doubts.

Briefly, prenuptial agreements often make sense for people entering into another marriage after divorce or after the death of a spouse.  Prenuptial agreements in these situations can help prevent friction between the couple over ownership of property you worked hard with your previous spouse to obtain and that you may feel the new spouse ought not claim or share an interest.  By the same token, prenuptial agreements help previously wed couples protect their children’s inheritance from the “evil step parent.” Prenuptial agreements can also make sense for people of extraordinary financial means to protect them from “gold diggers” too.  Otherwise, however, I think prenuptial agreements start a marriage off on the wrong foot.

Prenup Lawyer

Let me give you an imperfect analogy to explain why I’m against prenuptial agreements generally, especially for first-time marriages by the relatively young and poor:

You commit to training for and running a marathon, but just in case you decide not to finish training or finish the race itself, you enter into a “pre-marathon agreement,” which provides that in the event you do not finish, you are paid half of your hourly wage you would have otherwise earned if you had chosen to work at your job instead of train and two weeks’ vacation.  How likely are you to finish when you have not just a safety net, but an escape hatch?

How likely are you to stay committed to your training regimen?  How easy will it be for you to “realize” that you really didn’t want to finish a marathon in the first place, or that the rewards of training for and completing a marathon don’t justify the personal sacrifices required of you?

“But wait,” you may say, “what if through no fault of my own I can’t finish the training or the marathon?”  What if a car hits you during a training run?  What if you get dehydrated and can’t finish?  Friend, finishing the race is important, but it isn’t the point.  It never was.  In life there are no guarantees.  Training for the marathon is about conquering yourself (not coddling yourself), and in conquering yourself, you know yourself and your purpose more fully, deeply, and accurately.  Knowing the truth about yourself, your unique talents and limitations, you better equipped and more willing to bring out the best in yourself.  “Bring out the best” denotes that you must give of everything—your time, your money, your property, your attention, your labor, your comfort, your convenience, your body and soul.

Marriage is not simply a question of “what’s in it for me?”  Marriage is bigger than you, it’s bigger than your spouse.  It’s even more important than the both of you combined.

Don’t get a prenup to avoid the demands of divorce.  As my mother told me, it’s the people who do nothing who never fail.  Burn your ships and turn your back on the single life when you marry.  Commit to your spouse and to your marriage and their success.  Success is meaningless without the risk of loss, of pain, of sacrifice, of failure.  Success lies in transcending risk, pain, and sacrifice.

I know that the following thought comes from Jewish philosophy, but as I was writing this I could not find the reference, so I apologize for that, but I still wish to share it with you because it encapsulates both the value of marriage and why a prenuptial agreement in most cases (you’ll note that I did not state “in all cases”—there are times when a prenuptial agreement makes good sense):  Marriage is a lifetime commitment to provide constantly to your spouse emotional intimacy, thereby uncovering your true self and, ultimately, your unique purpose for being created.

Free Consultation with Prenup Attorney

If you have a question about getting a prenup or family law in Utah call Ascent Law at (801) 676-5506. We will 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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Bankruptcy and Foreclosure

OK, here’s the deal with bankruptcy and foreclosure. Despite what you may have heard, filing for bankruptcy does not necessarily permanently stop a lender from foreclosing on your home. Filing for bankruptcy will always temporarily stop the bank foreclosing on your home. This is true regardless of which chapter you file under.

I can tell you this because I’m a bankruptcy lawyer, that filing for bankruptcy can put a permanent stop to foreclosure, but that often hinges on your ability to pay the mortgage.

This post will give a basic consumer’s overview of bankruptcy and foreclosure. If you are thinking of filing for bankruptcy or dealing with foreclosure, you should always consult with an experienced bankruptcy attorney to see how bankruptcy may be able to help you get out of debt and back on your feet.

How long does bankruptcy stop foreclosure?

Bankruptcy and foreclosure are often linked because bankruptcy is somewhat famous as a foreclosure stopper.

How long does bankruptcy prevent foreclosure? That will depend on whether you file for Chapter 7 or Chapter 13 bankruptcy, whether you are able to maintain normal monthly mortgage payments, and how aggressive your lender chooses to be in pursuing the foreclosure sale.

Let’s begin with the difference between Chapter 7 and Chapter 13 bankruptcy when it comes to foreclosure.

Chapter 7 Bankruptcy and Foreclosure: How it Works

Chapter 7 bankruptcy is a faster process than Chapter 13 bankruptcy. Most Chapter 7 cases are open and shut within a six-month window. When you file bankruptcy (7 or 13), a court-ordered injunction, known as the automatic stay, prevents the bank from foreclosing on your home. This is true even if you file bankruptcy the day before the foreclosure sale is set to take place.

That’s the good news. Now, on to the not-so-good news. Even after a bankruptcy case has commenced and the almighty stay is in place, lenders can file what is known as a motion for relief from stay. The motion for relief allows them to continue with the foreclosure process even while your bankruptcy case is live.

Your Mortgage Lender May Gain the Right to Foreclose

If you enter bankruptcy behind on the mortgage, there’s a good chance that your lender will file a motion for relief from stay and will be given the right to continue with the foreclosure. However, even lenders who have successfully lifted the protection of the automatic stay are not always motivated to immediately resume with foreclosure. In fact, one of the biggest problems that consumers in bankruptcy are facing right now is lenders who are unwilling to foreclose on collateral.

Until your name is officially removed from the deed to your home, either through foreclosure or by surrendering it in bankruptcy, you are responsible for insurance, homeowners association dues, etc. There is a tremendous backlog of foreclosures in this country and, depending on your location, your lender may not have the resources to foreclose on your home for quite some time. It is possible that a Chapter 7 bankruptcy could disrupt the foreclosure process for a year or more. It is possible that it will only disrupt it for a couple months.

The point to take away is this: filing bankruptcy will temporarily stop foreclosure BUT lenders have a workaround. They can file the motion for relief from stay to get your home. Whether they choose to do this is entirely up to them.

Chapter 13 Bankruptcy and Foreclosure: How it Works

Unlike its faster cousin Chapter 7, Chapter 13 bankruptcy lasts for a period of between three to five years. During this time, you pay back a percentage of the debts you owe to your unsecured creditors.

If you file Chapter 13 bankruptcy with income that is below the median for a family of your size in your state, your Chapter 13 payment plan will be for three years. If you are like most debtors and file with income that is above the median in their state, your Chapter 13 payment plan will be for a period of five years. The automatic stay will prevent foreclosure for the length of the payment plan, either three or five years, as long as you maintain normal monthly mortgage payments during the life of the plan.

A little background: Many debtors enter Chapter 13 bankruptcy because they are hopelessly behind on their mortgage. The bank is demanding a lump-sum payment, or series of lump-sum payments to get caught up on a past-due mortgage. Many families simply do not have the means to comply. In order to stop foreclosure, they file for Chapter 13 because it allows for them to pay back the past-due mortgage balance over the life of the Chapter 13 plan. The amounts that are past due are broken up into small increments and added to the normal monthly mortgage payment, making the process of getting caught up far more manageable.

While this is a significant benefit for consumers, it is crucially important to understand that whether you file Chapter 7 or Chapter 13 bankruptcy, you do not get a free house. If you fall behind on your mortgage payments, the bank will have the right to foreclose on your home once they are successful in gaining relief from the automatic stay. If you can afford payments in a timely fashion, the bank can’t foreclose for the entire three- to five-year period or any other time in the future.

By handling your past-due payments through a Chapter 13 plan, you have the opportunity to permanently stop the foreclosure.

Do I need to file bankruptcy because of foreclosure?

Foreclosure is a scary process. Most people are not used to receiving official documents in the mail from scary authority figures. When they do, they tend to panic, and understandably so. However, before you go rushing off and file for bankruptcy to prevent foreclosure, take a hard look at the condition of your finances as well as your state’s deficiency laws. Many states, such as Arizona, have anti-deficiency laws on the books, which prevent lenders from suing borrowers on the note after a foreclosure sale.

You may have an emotional attachment to your home and because of that, you probably want to keep it, but if you can’t afford to maintain it, filing for bankruptcy won’t make things all that much better. Sure, it may buy you some time, and depending on your circumstances this could be valuable, but make absolutely sure it is before you throw yourself into the federal court system head-first.

Free Consultation with Bankruptcy Lawyer

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506. Attorneys in our office have filed over a thousand cases. We can help you now. Come in or call in for your free initial consultation.

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506

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Utah Divorce Timeline

We’ve tried to put together a time line for you to understand how divorce works from a divorce lawyer point of view.

Consider that Utah law (Utah Code § 30-3-39) requires that a divorcing couple participate in at least one session of mediation before the case can proceed to trial, although this mediation requirement can be waived for good cause, if the director of the dispute resolution program for the courts can be persuaded to conclude that mediation should be waived. Waiver of mediation rarely occurs, so you are typically better off giving mediation a try, even if it’s only for the purpose of ensuring you’ve met the requirement.

Mediation can last for several hours or over the course of several days, depending upon what the parties choose to do. If mediation results in you and your spouse reach an agreement and settling all of the issues, then it is not uncommon for your divorce action to be completed quickly; you and your spouse prepare and sign a settlement agreement, file that with the court, and then draft and file with the court the documents needed to dispose of your case. Once the court receives proof of your settlement and all the documents that the court needs to issue your decree of divorce, it is not uncommon for everything to be turned around in just a few weeks.

If you and your spouse do not agree upon the terms of your divorce, and one or both of you feels it necessary to go to trial and have the judge decide some or all of the issues in your divorce action, then this is how the process of preparing for and going to trial in your divorce case progresses:

Week 1:

Meet with your attorney, provide information needed to prepare your pleadings.

Week 2:

Prepare and file your complaint for divorce (this is also called a petition for divorce).

Service of process. Serve opposing party with a summons and a copy of complaint for divorce. Service of process usually takes about a week but can be longer if the opposing party evades service. You must serve the summons within 120 days of filing the complaint or your case can be dismissed.

Weeks 2 through 5:

Within 21 days of being served the summons and a copy of the complaint (30 days, if you serve the opposing party outside the state of Utah), the opposing party must respond to your complaint after being served with the summons and a copy of the complaint. Usually this response takes the form of what is known as an “answer” to the divorce complaint or, in most cases an answer and counterclaim. If the opposing party files a counterclaim against you, you have to respond within 21 days of being served with the counterclaim.

Week 6:

If a party fails to respond to a complaint for divorce (or to a counterclaim) within 21 days of being served (or within 30 days, if the opposing party was served outside the state of Utah), the opposing party is known as being “in default,” which means that the opposing party has failed to respond to your complaint for divorce within the time permitted, which allows you to seek judgment against the opposing party for failure to respond and participate in the action. This rarely happens, and even if you apply for default judgment and obtain it, if the opposing party moves to have your default judgment set aside in a timely manner, so that the case can be heard and decided on the merits rather than by forfeit, courts will often set aside the default on that basis. Still, don’t let that give you the idea that you can ignore court deadlines.

Week 6 through 8:

Prepare your Financial Declaration and Initial Disclosures and serve them upon the opposing party. The opposing party has 42 days after filing of the first answer to the complaint, or 28 days after the opposing party’s initial appearance in the action, which ever period is later.

Week 9:

This is the discovery period.

Discovery is the process by which the parties through the rules of civil procedure, can obtain evidence from each other and from other witnesses or other sources. Discovery tools include interrogatories, request for admissions, requests for production of documents, depositions, mental health examinations, custody evaluations, vocational assessments, and subpoenas, to name some.

Under the rules of civil procedure this period is 180 days long, unless the court modifies the time period for discovery. Rarely, if ever, is discovery shortened, although it can be. And frequently discovery is extended beyond the 180-day period.

Week 35:

At this point, the case should be ready to certify as ready to schedule for trial. If so, either party can file with the court a certificate of readiness for trial, and then ask the court to schedule a date for the judge and the parties to meet to preparations for the trial.

Week 43 to 47:

Trial is usually set about 3 months, give or take, after the pretrial scheduling conference.

Week 56:

Trial is held. Trials usually last 2 to 5 days, although they can take longer, depending upon how many issues there are to try and how complex the issues are.

Week 57 (or perhaps 61):

After the trial has been completed, the judge can take up to 60 days to decide the case, unless the judge obtains permission from the presiding judge of the court to take even more time to render a decision. Usually the court reaches a decision within several weeks, instead of 60 days, however.

Week 58:

After the judge decides the case, the judge will usually direct one of the parties to prepare a proposed draft of the Findings of Fact and Conclusions of Law and to prepare a proposed draft of the Decree of Divorce.

Week 59:

The party who the judge has the proposed Findings of Fact and Conclusions of Law and the proposed Decree of Divorce is required to send the opposing party the drafts for review. If the opposing party finds anything in the proposed Findings of Fact and Conclusions of Law and/or the proposed Decree of Divorce that does not comport with the trial judges decisions, the opposing party can file an objection to the proposed Findings of Fact and Conclusions of Law and/or to the proposed Decree of Divorce, and the opposing party has seven days in which to do so.

Week 60:

If the opposing party files an objection to the proposed Findings of Fact and Conclusions of Law and/or the proposed Decree of Divorce, the other party can respond to that objection within seven days. At that point the proposed Findings of Fact and Conclusions of Law and the proposed Decree of Divorce are submitted to the judge for the judge to decide what the ultimate form of the Findings of Fact and Conclusions of Law and of the Decree of Divorce will take.

Week 61:

Assuming that the court gets back to you within a week or two, the court will then issue the final Findings of Fact and Conclusions of Law and final Decree of Divorce.

If either party or both parties feel that the judge’s decision does not comply with the laws governing divorce, then either party or both parties may appeal the judge’s decision by filing a notice of appeal with the Utah Court of Appeals, which notice of appeal must be filed within 30 days after the date of the entry of the Decree of Divorce.

Free Consultation with Divorce Lawyer in Utah

If you have a question about divorce law or if you need to start or defend against a divorce case in Utah call Ascent Law at (801) 676-5506. We will help you today.

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506

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If You Agreed to Bad Terms in Your Divorce Settlement You Will Get Screwed

So you don’t like the terms of your divorce settlement and you want to modify those terms. I’ve heard this many times because I’m a divorce lawyer. Hopefully you met with an attorney before you signed the divorce papers.

I hope that when you signed that settlement agreement you didn’t agree to getting hosed and then think you can complain about being hosed and have the court bail you out.

With rare exception, by agreeing to the hosing that means you’re stuck with getting hosed. If you pulled the equivalent of a “Yes, Dear” when you settled your divorce case out of court, and now you want to “modify” your divorce settlement, you likely have a serious problem.

We know what you probably did: you got tired, depressed, scared, your ran out of money, and so you agreed to what you knew to be a lousy settlement out of frustration and/or fear and thought “any settlement is better than continuing to litigate.”

You may have also settled thinking that you’d broach the subject again down the road, when your ex had calmed down. We get it. We see this all the time. But the “I’ll just agree to getting hosed now and seek a change later, after the dust settles” mentality doesn’t fly. Agreeing to the hosing means you’re stuck with what you agreed to. You asked for it.

Coming back to your ex or to your judge a few months or even a few years later proposing some changes won’t work unless you can convince your ex to change or unless you can show the court that the law warrants a change. That’s not easy.

You can’t just request a change because you feel a change is appropriate. People who try to get their decrees of divorce modified on this basis are in for disappointment. Deep down, they know why: the one who got the better end of the lop-sided deal you made rarely grows a conscience (no matter how long you let them “cool down”), nor will they magically concede you are being taken advantage of. Your ex will respond with, “You agreed to these terms. You told me they were fair and acceptable to you then. Well, they’re fair and acceptable now too, and I am not willing to change them.” And that’s not your only problem.

The court follows the same reasoning in saying “I approved your agreement, and I won’t reconsider it after the fact.” Now don’t confuse a bad deal you made voluntarily with a fraudulent deal you made innocently. If you agreed to a settlement based upon your ex making false and misleading representations to you, AND if you can prove that to the court AND you file a motion or new law suit within the VERY short time periods the court rules permit, you can get a fraudulent settlement overturned.

And don’t confuse a bad deal you made voluntarily with a material and substantial change in circumstances. If you agreed to pay alimony based upon an income of $75,000, and then you lost your job because of a medical condition that leaves you unable to work that job or any other job that comes close to paying $75,000, that’s known as a material and substantial change in circumstances that arose through no fault of your own. If material and substantial circumstances arise, you can ask your ex to modify, and if your ex won’t agree, you can go to the court asking the judge to modify the decree to fit the change in circumstances. Just remember: to modify a divorce decree based upon a material and substantial change in circumstances means generally that it has to be a big, serious change, a change you didn’t cause, and a change that wasn’t foreseeable.

OK, now back to settlements made out of desperation and fear, etc. If you choose to make a bad deal—whether with the used car dealer or after you order Miracle Blade knives off the TV or in a divorce—you’re stuck with the outcome. Even if you get a good attorney to try and get a change your decree down the road, it won’t work (so save your money on that attorney). Courts honor and enforce agreements between divorcing spouses. So, no matter how ugly your divorce might be, no matter how long it drags on, if you think a quick settlement now, followed by a second bite at the apple later is a smart “strategy,” think again.

Free Consultation with a Utah Divorce Lawyer

If you have a question about divorce law or if you need to start or defend against a divorce case in Utah call Ascent Law at (801) 676-5506. We will help you now.

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506

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Divorce Can Make Good People Bad

Why is it that people who seemed to be fairly rational before divorce turn into complete paranoid, hyper-defensive maniacs once the separation and divorce process begins? Couples who promised to do this divorce thing respectfully suddenly turn into ferocious warriors, letting their mean-and-petty streak show through, especially when they get into the pit with their attorney.

Sure, some people are just jerks, but what makes otherwise good people behave so poorly? It turns out this “crazy” behavior is fairly predictable and normal in such circumstances. That’s not an excuse for it, but when you better understand what’s pushing your buttons so badly, you can finally begin to make healthier choices and address the feelings of overwhelm that are triggering such unseemly (read: king of the jerks) behavior.

Here are the panic-button pushing reasons that divorce makes us act so out of character:

Disappointment Over Unmet Expectations

When you said “I do” you did so with expectations about what marriage is all about. But maybe you never fully shared those expectations with the person you actually said your vows to. Many times we don’t articulate our expectations specifically because we assume everyone just knows this is how marriage is supposed to be. But, “everyone” may only be your family and the way they did things, or your closest friends with whom you have discussed this over and over. It never included your now soon-to-be-ex-spouse who (don’t forget) came into marriage with some unspoken expectations of their own. When our deeply held expectations (like “marriage is forever, no matter what”) are unmet, we often feel betrayed, making it easy to feel indignant and cast our ex as the enemy. We believe they let us down. But, if we’re honest, were they ever fully on page with us to begin with?

The big challenge of marriage is putting both partner’s expectations on the table and then working together to create a mutually agreed upon vision for how your marriage will actually work.

Fear of Change

During periods of immense and drastic change (such as divorce), your mild-mannered brain goes into survival mode, ready at a moment’s notice to fight or retreat, thanks to that reptilian brain you inherited from your ancient ancestors.

Whether is it your fear of losing status (social, financial, etc.), a sense of uncertainty about the future, a worry that you don’t belong anymore in your social circle, or just a feeling like this whole situation is so unfair—the problem-solving part of your brain can’t do its job until your panicked reptilian brain calms down.

Uncertainty and fear about how things will turn out take a steep toll on you mentally and physically. Stress from staying in an “I’m in danger” primal mindset can short-circuit your patience, your willingness to listen, and your ability to communicate effectively. Your health is also likely to take a dive as well, making you prone to sleep deprivation and low stamina at a time when you are taking on mountains of critically important paperwork, decisions, and details as part of the divorce. So, even if you want to make good choices, the stress response of facing so much uncertainty and change at once is sure to cause you at least some temporary loss of rational thought and behavior.

Feeling Powerless and Out of Control

In normal life, you are used to being competent and in charge, but now you are thrust into the unfamiliar, unsure of how to get things done right in the divorce process (and in the new life waiting after it). You are being forced to make important decisions immediately. You have to hire a high-priced expert to navigate you through the legal aspects. And hiring a lawyer kicks off what could be seen by the other as an attack; you have drawn up sides and are now ready for war.

Communication is out the window when you feel powerless and unable to fully control things that profoundly affect your life. You have to trust your attorney (who was likely a complete stranger to you before this situation) to lead the charge and make decisions that will affect your future (and your childrens’ future) for years to come. It all costs a fortune. Is it any wonder each side feels like they are being screwed?

A Sense of Entitlement

Splitting apart all of the property (and associated memories) the two of you acquired through your sweat, equity, and hard-earned money can feel like a spiteful business transaction. Each of you has a sense of ownership and “it wouldn’t have happened without my efforts” point of view. Your decisions right now are dominated by your emotions, not your logical problem-solving self.

If you have kids, there is likely an overwhelming sense of guilt and worry that this divorce experience might be damaging them. They may even think it is their fault that mommy and daddy are splitting up. The kids end up as pawns in a fight over what you and your ex believe you each deserve or never deserved. Each of you are in it to “get yours” in the name of fairness. But the ego battle waging between you both in the pursuit of “emotional justice” ends up feeling more like scrambling down an endless tunnel with no cheese at the end.

So, what’s a stressed out person to do in order to keep divorce-induced jerky behavior in check?

Take back your dignity. Get in touch with who you are when you are at your best. Be clear about what is important to you and why, and how you want to remember yourself when this is over. Now, behave your way into that outcome.

Assemble a good team to support you in this transition from married to single. Identify where you need more information, different perspectives, and validation that will get you through this in a way that lifts you up (versus pulling you down). Pick people who can support you in being your best. Fight the urge to surround yourself with people who will urge you to seek revenge, act petty, or take your ex to the cleaners. When you look in the mirror, you want the best version of you reflecting back as you move into your new future.

Listen, listen, listen. Communicate, communicate, communicate—with your children, with your ex-spouse, and with the experts you are relying on to help you make the best decisions based on your needs, wants and values. Don’t be afraid to acknowledge your role in how things are going. If you misstep and act like a jerk for a moment, own it, and then apologize and move on.

Remember your past successes. Take care of what is important to you, ask for help, and remember the times when you successfully dealt with challenging times in the past. What allowed you to be resilient then? How can that help you here and now? You’ve been through hard times before—you can handle this.

Dealing with a difficult ex certainly doesn’t make the divorce process any easier. But neither does being a difficult ex. So keep yourself in check. By understanding some of the hot buttons that you both are pushing in each other, then maybe you can pause, take a breath, drop the jerk behavior and make better choices.

Free Consultation with Divorce Lawyer in Utah

If you have a question about divorce law or if you need to start or defend against a divorce case in Utah call Ascent Law at (801) 676-5506. We will fight for you.

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506

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Reasons Parents Lose Custody of Their Children

Although most laws are designed to help divorced parents maintain a healthy relationship with their children, there are times when some issues may disqualify divorcees from having legal custody of their kids. Most of these cases involve allegations related to child abuse or neglect. However, some allegations could be false statements from a contentious former spouse. If you are dealing with a child custody matter is best you contact a Salt Lake City child custody attorney to discuss your legal options.

THE PROCESS

The process generally starts with one of the parents notifying the court about his or her concern involving a former spouse or parent of the children. Evidence must be provided otherwise the allegations of abuse are not valid. If the judge determines the behavior is a threat to the child’s safety, an investigation will take place. An investigator may take a look at the circumstances surrounding the allegations and decide whether or not the allegations are true.

CHILD ABUSE

This is a common reason why some parents may lose the custody of their children. The court will see if there is a history of child abuse. Some factors that help the judge determine if there was child abuse include scars, bruises, marks, and cuts. Whether it was initiated by anger or inappropriate behavior, child abuse will definitely cause the parents lose custody of their children. If you suspect your former spouse has abused your child, notify the police and contact Salt Lake City child custody attorney.

DOMESTIC VIOLENCE

There are cases that don’t involve child abuse yet if the child witnessed child abuse against the other parent during the last 5 years; the court may deny sole child custody. A history of abuse will be considered when making custody decisions. Granting custody to an abusive parent is not in the child’s best interest.

DRUG AND ALCOHOL ABUSE

Courts will also take a look at other factors such as the use of controlled substances. The habitual use of drugs or alcohol by either parent is detrimental to the interests and safety of the kids, therefore, the parent addicted to these substances can’t be trusted with raising the children.

VIOLATING A COURT ORDER

Parents should respect custody orders. Doing otherwise may result in a parent losing custody. Although it’s all based on how the order was written, violating the order doesn’t help advance the case. Some cases involving joint custody, for example, require both parents making important decisions about the child. If one of the parents fails to consult the other parent before making an important decision, the custody order could be modified and the parent may lose custody.

PARENTAL ALIENATION AND CO-PARENTING

When one of the parents is manipulative and he or she uses these tactics to alienate the children from his or her former spouse, there is a chance he or she will lose the custody. Co-parenting is sometimes the best option in some scenarios as it allows parents that can’t get along to follow a strict joint custody schedule.

PROTECTING YOUR CHILDREN FROM PARENTAL ALIENATION

It is natural for children whose parents live apart to want to spend more time with them. Most children feel that they will not be able to spend enough time with mom and dad after divorce. Custodial parents generally have less time for the children due to the many responsibilities they have and non-custodial parents aren’t around as much as they used to. In the midst of all this chaos, some parents may take advantage of the situation and manipulate their children into fearing or expressing hostility towards their former spouses. This is when parental alienation takes place. A child may reject one parent following a harshly contested divorce. These cases generally require the intervention of a Salt Lake City divorce attorney. Several problems may arise that only an experienced attorney is equipped to handle.

Divorce can be one of the most frightening experiences for children since their lives may change dramatically after their parents decide to go separate ways. They have to adapt to a new family structure they do not like yet they have no control over it. Children need the love and care of both parents when growing up. Unfortunately, some parents don’t understand this and they choose to involve their children in a harsh divorce battle. It is a way to harm a former spouse by taking the children from them.

HOW CAN YOU PROTECT YOUR CHILDREN?

Let’s start by taking a closer look at the common signs of parental alienation:

• The child avoids contact with the targeted parent for no particular reason.
• The targeted parent is constantly being accused of wrongdoing.
• The child says inappropriate things for their age.
• The child feels confident about the rude behavior.
• The child insists that it is their decision to no longer spend time with the targeted parent.
• The child may also refuse to no longer be with the family of the targeted family.

DEALING WITH PARENTAL ALIENATION

It all depends on your child’s age and your relationship with them. If you still communicate with your children, there are some steps you can take to stop the alienation:

• Don’t talk bad about your former spouse in front of your children.
• Don’t act like the other parent or imitate the alienating behavior.
• Reassure your children that you will always love them and care for them no matter what.
• Don’t blame your children.
• Remind your children of the great times you had together.
• Respect your visitation schedule.
• Talk to aSalt Lake City divorce attorney to help you combat parental alienation.

Free Initial Consultation with Family Lawyer

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, 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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How to Pay Off High Interest Credit Card Debt

Perhaps like many Americans your New Year’s resolution involves paying down credit card debt. After all, even the most ardent supporter of the plastic hears that little voice in the back of their head “credit card interest rates are a huge ripoff, I shouldn’t use my Visa card as much as I do.” To be sure, if you’re trying to get your financial life in order, taming high interest credit card debt is job number one. Unfortunately, many consumers get caught in the minimum monthly payment trap, leaving stagnant balances that seem to never go away. So how do you go about paying down credit card debt and getting rid of Mr. Visa once and for all?

Damage Assessment

The first step to paying off your credit card debt is to figure out the exact amount that you currently owe. It’s not until you have exact balances and the interest rates you’re being charged that you’ll know how high of a mountain you’re faced with climbing. In addition to outstanding balances, add up the monthly payment for each card and figure out how much of your income is going to credit card payments every month. Organization is key. We’ve created a simple chart to help you organize what you owe.

Break Your Dependence on Credit Cards

In other words, stop using the credit cards! The idea in starting a plan to pay down credit card debt is to attack the principal balances rather than just paying interest every month. The credit card companies want you stuck in debt, feeding them their interest every month. The only way to stop interest from increasing is to stop the balances from increasing. Put together a budget and stick to it, without using your credit cards. Often, aggressive budgeting is the fastest way out of debt. It might hurt at first, but the sense of satisfaction you’ll receive from paying off your credit card debt will far outweigh any temporary inconvenience. If you absolutely need credit cards to live, it might be time to consider filing for bankruptcy.

Pay Off One of the Cards

To gain momentum in your quest out of credit card debt, pay off the smallest card first. Completely retire one of the balances, it feels good. Some will argue that tackling the highest balances first makes sense, but momentum will play a big role in getting you out of credit card debt. Get rid of the smallest card and the rest will start to fall in line.

Pay More Than the Minimum Monthly Payment

Salt Lake City bankruptcy attorney wrote an excellent post on the National Bankruptcy Forum describing the major problems consumers face when they try to pay just the minimum on a credit card. He listed a table showing how long it takes to pay off small debts at low interest rates which we’ve included here:

$1000 balance, 18% interest, minimum payment $100 = 11 months to payoff $1000 balance, 18% interest, minimum payment $50 = 24 months to payoff $2000 balance, 18% interest, minimum payment $100 = 24 months to payoff $2000 balance, 18% interest, minimum payment $50 = 62 months to payoff $3000 balance, 18% interest, minimum payment $150 = 24 months to payoff $3000 balance, 18% interest, minimum payment $100 = 40 months to payoff $4000 balance, 18% interest, minimum payment $200 = 24 months to payoff $4000 balance, 18% interest, minimum payment $150 = 34 months to payoff $5000 balance, 18% interest, minimum payment $200 = 32 months to payoff $5000 balance, 18% interest, minimum payment $150 = 47 months to payoff $5000 balance, 18% interest, minimum payment $100 = 93 months to payoff

As John points out in his article, these figures don’t even factor in administrative or late fees which can add up quickly! The bottom line is that minimum monthly payments on credit cards usually represent interest only, the underlying balances aren’t touched by making these payments. To actually get out of credit card debt it will be crucial to pay more than the minimum monthly payment, there’s simply no other way.

Transfer Debt to Lower Interest Cards

As the table above demonstrates, the credit card companies kill you with high interest rates. As we’ve established, if you’re trying to get out of debt, paying the minimum won’t do. Instead, try transferring balances from one lower interest card to another, and keep doing it as opportunities arise. Many banks offer promotional “teaser” rates to induce consumers to open a line of credit. If you pay enough attention to deadlines, you can move your credit card balances around to banks offering the lowest rate, this will cut down on some of the money you’re throwing away on interest.

Negotiate With The Bank

Many lenders are open to settling past-due credit card bills for less than the full amount owed and a good consumer attorney can aid in negotiating with your credit card lender as a way to avoid bankruptcy. How is this possible? Once a loan goes into default for long enough, lenders no longer carry it on their books as a performing asset. In cases where a consumer has fallen behind for many months, recovering anything at all may be considered gravy by the credit card lender. This doesn’t mean your lender will be a push over, they’ll likely ask that you produce financial information as part of the negotiation process, but to the extent you have some cash to throw at the problem, you might be able to get out of debt for far less than what you owe. In these cases, the amount of debt forgiven will be taxed as income come April. For more information, see: Tax Consequences of Forgiven Debt.

Know When to Look for Help

If you fallen behind on your credit card bills or need credit cards to purchase basic necessities such as groceries and gas, it may be wise to meet with a bankruptcy attorney. Although options outside of bankruptcy should always be explored, filing for bankruptcy protection will eliminate credit card debt as well as medical bills.

Free Consultation with Bankruptcy Lawyer

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506. Attorneys in our office have filed over a thousand cases. We can help you now. Come in or call in for your free initial consultation.

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506

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SEC Charges Executives with Stealing

It’s important to keep in the loop as a Securities Lawyer. For example, the Securities and Exchange Commission charged two former executives at a credit card processing company with masterminding a fraudulent scheme to steal millions of dollars through phony expense reimbursements, inflated invoices, and other improper accounting tactics.

The SEC’s complaint alleges that iPayment’s then-senior vice president of sales and marketing Nasir N. Shakouri and then-executive vice president and chief operating officer Robert S. Torino routinely reimbursed themselves for payments that were never actually made to third-party vendors using their personal credit cards.  They also allegedly conspired with vendors to inflate invoices and receive kickbacks from the overpayments, and claimed improper commissions and bonuses related to other corporate funds they improperly diverted in various ways.

The SEC’s complaint also charges three other iPayment executives – Bronson L. Quon, John S. Hong, and Jonathan K. Skarie – with participating in the scheme and helping Shakouri and Torino falsify books and records to hide the thefts of corporate funds.  Quon, Hong, and Skarie were allegedly rewarded for their assistance with misappropriated iPayment funds.

“As alleged in our complaint, these executives manipulated iPayment’s internal accounting systems, lied to the external auditor, and caused approximately $11.6 million in losses to the company,” said Sanjay Wadhwa.

In a parallel action, the U.S. Attorney’s Office for the Central District of Utah today announced criminal charges against Shakouri and Torino.

The SEC is seeking disgorgement of ill-gotten gains plus interest and penalties as well as officer-and-director bars.

SEC, NATIONAL BANK OF BELGIUM AGREE TO ENHANCED COOPERATION AND INFORMATION SHARING REGARDING EUROCLEAR

The Securities and Exchange Commission today announced that it has entered into an arrangement with the National Bank of Belgium to enhance cooperation and information sharing regarding expanded services by Euroclear Bank, which provides clearance and settlement through its operation of the Euroclear System.

Brussels-based Euroclear Bank is subject to prudential supervision and oversight by the National Bank of Belgium as a credit institution and as a clearing agency.  The SEC granted Euroclear’s predecessor an exemption from registration as a clearing agency in 1998, allowing it to provide clearing services for U.S. government securities.  On Dec. 16, 2016, the SEC approved Euroclear’s application to modify its exemption from registration, enabling it to also provide limited clearing agency services for U.S. equity securities.

On March 9, 2017, the SEC and the National Bank of Belgium added an addendum to their 2001 Understanding Regarding An Application of Euroclear Bank for an Exemption under U.S. Federal Securities Laws regarding Euroclear’s clearing activities in the U.S., enhancing their ability to exchange information about Euroclear’s new services.

“This addendum will expand the signatories’ ability to cooperate and exchange information related to Euroclear Bank and augment the SEC’s oversight of Euroclear Bank’s activities under its exemption order,” said Paul A. Leder, Director of the SEC’s Office of International Affairs.

SEC CHARGES FIRMS INVOLVED IN LAYERING, MANIPULATION SCHEMES

The Securities and Exchange Commission today announced fraud charges against a Ukraine-based trading firm accused of manipulating the U.S. markets hundreds of thousands of times and the Utah-based brokerage firm and CEO who allegedly helped make it possible.

The SEC’s complaint alleges that Avalon FA Ltd touted itself to traders as a destination to engage in layering, a scheme in which orders are placed but later canceled after tricking others into buying or selling stocks at artificial prices, resulting in illicit profits.  Avalon allegedly made more than $21 million in the layering scheme involving U.S. stocks during a five-year period.  According to the SEC’s complaint, Avalon also made more than $7 million in illicit profits through a cross-market manipulation scheme in which the firm bought and sold U.S. stocks at a loss in order to manipulate the prices of the stock and its corresponding options so that it could then profitably trade at artificial prices.  Avalon allegedly used traders in Eastern Europe and Asia to conduct its trading, and the firm kept a portion of the profits and collected commissions from the traders.

The SEC’s complaint also describes fraud charges against Avalon’s named owner Nathan Fayyer and Sergey Pustelnik, who allegedly kept his controlling interest in Avalon undisclosed and embedded himself at Lek Securities as a registered representative, using his position to facilitate the schemes.

The SEC further alleges that Lek Securities and its owner Samuel Lek made the schemes possible by providing Avalon with access to the U.S. markets, approving the cross-market trading scheme, and improving its trading technology to assist Avalon’s trading.  According to the SEC’s complaint, Lek Securities also relaxed its layering controls after Avalon complained.  Avalon was the highest-producing customer for Lek Securities in terms of trading commissions, fees, and rebates generated.

“As alleged in our complaint, Avalon openly marketed itself as a destination for manipulative trading, and Lek Securities opened the gate to allow the schemes into the U.S. markets despite repeated warnings that its customer was manipulating the market,” said Stephanie Avakian, Acting Director of the SEC’s Division of Enforcement.

After filing its complaint in U.S. District Court for the Southern District of Utah, the SEC obtained an emergency court order freezing Avalon’s assets held in its account at Lek Securities as well as freezing and repatriating funds that Avalon has transferred overseas.

SEC FREEZES BROKERAGE ACCOUNTS BEHIND ALLEGED INSIDER TRADING

The Securities and Exchange Commission today announced an emergency court order to freeze assets in two brokerage accounts used last week to reap more than $1 million in alleged insider trading profits in connection with a merger announcement by telecommunications companies.

According to the SEC’s complaint filed in U.S. District Court for the Southern District of Utah, highly suspicious transactions have been detected surrounding last week’s announcement that Liberty Interactive Corp. had agreed to acquire General Communication Inc.  The traders, who are currently unknown, allegedly used foreign brokerage accounts in the United Kingdom and Lebanon to purchase call option contracts through U.S.-based brokerages and on U.S.-based exchanges in the days leading up to the April 4 public announcement of the acquisition.  The court’s order freezes the foreign accounts’ assets contained in the U.S. brokerages.

According to the SEC’s complaint, some of the risky options positions taken in these accounts represented virtually 100 percent of the market for those options.  Following the acquisition announcement, General Communication’s shares rose more than 62 percent and the brokerage account customers allegedly sold the bulk of the contracts.

“As alleged in our complaint, the timing, size, and profitability of the trades as well as the absence of any recent trading by the accounts in these particular securities make the transactions highly suspicious,” said Michele Wein Layne.  “We don’t hesitate to act quickly and proactively to freeze accounts and prevent proceeds from dissipating while we continue to investigate dubious transactions and identify the traders behind them.”

The emergency court order obtained by the SEC requires the traders to repatriate any funds or assets located outside the U.S. that were obtained from the alleged insider trading.  The traders are prohibited from destroying any evidence.  The SEC’s complaint charges the unknown traders with violating Section 10(b) of the Securities Exchange Act of 1934 and Exchange Act Rule 10b-5.  The SEC is seeking a final judgment ordering the traders to disgorge their allegedly ill-gotten gains plus interest and penalties and permanently enjoining them from future violations.

Free Initial Consultation with Lawyer

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, 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

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Discharging Student Loans in Bankruptcy

We all know college is expensive. But just how hard is it to pay off student loans? According to new information published by the National Bureau of Economic Research (NBER), choosing the right school to attend can have a huge effect on your future — but not just on what type of job you might be more likely to get with a fancier college on your resume. It might impact your ability to pay off student loans. This topic is important to bankruptcy lawyers because if you ever get behind on payments…. well, read on.

Sure, picking a $40,000-per-year-tuition college over one that’s half the price should be a serious topic around the dinner table when you’re a high school student. How many grants or scholarships are you eligible and applying for? How big of a loan will you need to get to cover the rest? And how will you pay it all back?

The Treasury Department staffers who authored the working paper for NBER found that low- and middle-income college borrowers struggle with loan burdens after leaving school by matching tax data with information in the Department of Education’s Student Loan Data System. Most low-income borrowers haven’t touched repaying any of the original balance of their student loans five years after college, while a borrower from a high-income family has repaid about 19%.

This is because the employment outcomes for students from low-income families aren’t as fruitful. More than 1 in 10 students from families earning fewer than $30,000 per year are unemployed five years after leaving school, while another 36% are working but earning fewer than $25,000. Meanwhile, only 27% of students from families earning $75,000 to $100,000 are earning fewer than $25,000, while 8% are unemployed.

Additionally, about 1 in 4 borrowers from low-income families default on student loans within five years of entering repayment.

Why the difference?

According to the data gathered for NBER, students from low-income families face tougher challenges with student loans based on their lack of access to wealth. Often, the balance of their loans is larger than when they originally took them out, five years after graduating. Wealthier borrowers also rely less heavily on student debt to finance college, according to left-leaning think tank Demos.

However, the NBER paper suggests that when low-income borrowers attend less selective schools that are still in the middle of the road in terms of economic mobility, about half end up earning more than $25,000 a year after entering repayment.

It’s important to note that the data was collected for student loans in repayment between 2004 and 2009, the tail end of that being right around the time of the economic collapse.

According to the Equality of Opportunity Project, schools that ranked best for upward mobility for low-income borrowers were:

• Cal State-Los Angeles
• SUNY-Stony Brook
• CUNY System
• Glendale Community College
• University of Texas at El Paso

The percent of students who come from families in the bottom fifth but reach the top fifth of income distribution are included in the analysis by the Equality of Opportunity Project. Cal State-Los Angeles has the best mobility rate at nearly 10% of students achieving that tier, while the average college in the U.S. only churns out 1.9% of graduates who dramatically increase their wealth.

So, which college is right for me?

You’ll need to weigh a lot of factors when choosing which college is right for you: programs offered, acceptance rate, location, price, and more. If economic mobility is important to you, it’s good to have the data behind trends seen in colleges today.

The colleges reporting the lowest median parent income on the list include schools in New York, Texas, Kansas, New Mexico, and Florida. Of the lowest set of parent median incomes, the best child (individual) median income was reported from graduates of Vaughn College of Aeronautics and Technology in New York, where graduates ages 32-34 are earning $53,000 per year compared to their parents’ $30,900 per year.

No goal of becoming a pilot or engineer? That’s OK. If you go to University of Texas, most campuses will show results of a higher child income than parents’ income — many of which also tend to be in just the $30,000 range.

At City College of New York, you’ll earn $48,500 per year compared to your parents’ $35,500. At Cal State-Los Angeles, you’ll earn $43,000 for your parents’ $36,600.

Meanwhile, some schools aren’t the best choices, economically. Beauty schools, like Paul Mitchell in Costa Mesa, California — the lowest child median income on the list at $10,300 per year compared to their parents’ $85,200 per year — and some technical and community colleges can affect upward mobility rankings. However, students earning two-year degrees at public colleges, in addition to four-year ones, generally have an easier time paying off student loans. Community college also can help students save a lot of money by earning general credits they’d pay big bucks in tuition for per credit hour at a four-year school.

For students, both child and parent, who never attended college, they’re making just $11,500 per year on their parents’ $35,200.

Interested in what school results in the highest median income for students? It’s Saint Louis College of Pharmacy in St. Louis, Missouri. The median child income is $123,600 — but that’s also coming from a parent median income of $92,500.

What’s the best plan for paying off student loans?

Student loan debt can be tough. It’s important to explore all college payment options when also considering adding student loan debt, and when you’re able to start repaying your debt, you should begin doing so immediately.

It’s also important to know that if you’re feeling crippled by student loan debt years after college, you have options. However, the law makes bankruptcy only an option in discharging student loan debt if you can show undue hardship. If you can satisfy each of these requirements, you may be able to discharge student loan debt:

1. Based on your current income and expenses, you’re unable to maintain a minimal standard of living for yourself and your dependents if you’re forced to pay off your student loans.
2. You have additional circumstances that indicate that this state of affairs most likely will continue during most of your repayment period.
3. You have made good faith efforts to repay your loans.

Erasing Student Loans in a Utah Bankruptcy

Student loans are considered to be in the lowest category of general unsecured debt when you’re looking at bankruptcy, which includes credit card and medical debt. It’s incredibly difficult to get a discharge on student loan debt, even though a growing number of influencers in consumer bankruptcy think that it should be dischargeable. Right now, our office will only file a motion to have student loan debt discharged is if you are permanently disabled and will never earn sufficient income in your lifetime to pay it back.  Even then, there is no guarantee we can do it.  The best route, however, would be to research all your financing options fully before choosing a college, possibly pursuing a degree that may land you a job that allows for loan forgiveness, like being a public school teacher or a nurse, and getting on a repayment plan after you graduate and sticking to it.

Free Consultation with Bankruptcy Lawyer

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506. Attorneys in our office have filed over a thousand cases. We can help you now. Come in or call in for your free initial consultation.

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

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via Michael Anderson http://www.ascentlawfirm.com/discharging-student-loans-in-bankruptcy/

Who are Debt Collectors?

When you fall behind on a debt for an extended period of time, creditors will often send your account to “collections.” As many of you probably already know, this means that you will have a debt collector calling and writing to you in an attempt to collect on the debt. Millions of Americans are pursued by debt collection companies every year, however, very few are familiar with their business model, the laws that regulate them and how best to put a stop to their abusive tactics. As a bankruptcy lawyer, I’ve seen this time and again. This post will help you get up to speed on the debt collection industry and give you practical tips for dealing with the letters and phone calls.

Who are these shadowy figures that call at all hours to collect on past-due debts?

The Fair Debt Collection Practices Act (FDCPA) is a piece of federal legislation that regulates the activity of debt collectors. The FDCPA defines debt collectors as:

any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.

Just as the name implies, debt collectors are individuals or businesses whose primary job is to collect debts. Although they usually have funky names like RNC Financial or Arrow Financial Services, collection law firms who regularly pursue past due accounts qualify as debt collectors. It is important to be aware be aware that original creditors, such as a bank or credit card company, will not be governed by the FDCPA because they do not fit the definition of a debt collector. The principal purpose of their business is not to collect debts. Generally speaking, the only time an original creditor will qualify as a debt collector under the FDCPA is when they use a name other than their own to collect the debt. In these cases, the FDCPA considers creditors to be debt collectors because they are behaving like collectors.

How do debt collectors get paid?

There are two common arrangements under which creditors work with debt collection companies: contingent payment and debt sale. Under a contingent payment arrangement, the original creditor hires a debt collection company to pursue a delinquent debt, with the collection company receiving a percentage of the amount they are able to collect. Depending on the type of debt, the age of the account and how many attempts have already been made to collect on it, the fee for successfully collecting could range from 10% to 50%. The advantage for debt collectors in a contingent arrangement is cost; they aren’t required to front any money in order to gain the right to pursue the debtor.

By contrast, the second most common arrangement under which creditors work with debt collection companies, selling debt, requires debt collectors to purchase past due debts so that they can then try to come after the debtor for the full outstanding balance (or as much of it as they can get). In cases where a borrower has fallen behind and the creditor views the likelihood of successful collection to be small, they may elect to sell the debt at a highly discounted rate to a debt collection company. For example, Creditor X is owed $500,000. Based on the financial picture of the borrower, Creditor X calculates a very small likelihood of collecting the full outstanding balance. In order to recoup some money, Creditor X sells the $500,000 debt to a debt collector for $100,000 or 20% of the outstanding loan balance. The debt collector then pursues the debtor for as much of the outstanding balance as possible. Everything they collect over and above $100,000, is profit.

Consumers need to be aware that the sale of debt in no way guarantees that the debt collector has the legal right to collect. In many cases they do not. Numerous articles have been written on this Forum about debt collection companies who buy “zombie debt,” i.e. debt that is no longer owed due to the expiration of the statute of limitations. In other words, it is not uncommon for debt collection companies to try to pursue consumers for debts that they do not legally owe.

Who regulates debt collection companies? How can I stop them from calling?

Debt collectors are regulated by state and federal law. The scope of this article is to short to address all of the various state laws on the subject, so we will continue to discuss the federal FDCPA instead. I you have questions about your state’s consumer protection laws, it’s always best to contact a local attorney.

Now back to the FDCPA. In order to address widespread abuses in the debt collection industry, Congress passed the FDCPA in order to rein in the tactics of debt collectors. The FDCPA prohibits abusive or coercive behavior in pursuit of a debt and awards consumers statutory damages of $1,000 for each violation of its code of conduct.

Specifically, debt collectors are prohibited from contacting 3rd parties, such as family members and friends of the borrower, when they have knowledge of the borrowers current contact information and address. They must limit collection calls to reasonable hours and must not intentionally harass debtors. Further, once a consumer communicates to a debt collector in writing that they wish for communications to cease or the collector learns that the debtor has hired an attorney, the collection efforts must stop.

Always send written correspondence via fax or certified mail so that you can prove it was sent. If it becomes necessary to pursue a claim under the FDCPA, proof of written communication will help your case.

Debt Collector Law Summary

Debt collectors are third-party businesses whose sole purpose is to collect debts. Under federal law, original creditors do not qualify as debt collectors unless they are attempting to collect under a different business name than was used to extend credit in the first place. Debt collectors get paid when they collect on delinquent accounts; either as a percentage of what they’ve collected or after purchasing the debt outright. State and federal law regulate the debt collection industry. The FDCPA prohibits abusive or coercive tactics on the part of debt collectors when they are pursuing a debtor. If you find yourself overwhelmed by collection calls or letters, it is always a good idea to meet with a local attorney. There are powerful laws that can help.

Free Consultation with Bankruptcy Lawyer

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506. Attorneys in our office have filed over a thousand cases. We can help you now. Come in or call in for your free initial consultation.

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

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via Michael Anderson http://www.ascentlawfirm.com/who-are-debt-collectors/