I have been getting more and more calls from my former bankruptcy clients, who have been working hard on rebuilding their credit and savings post- bankruptcy discharge, asking when they can qualify to buy a home. The answer used to be 2-4 years, but there are several mortgage companies out there who have been opening up financing for post-bankruptcy clients to as soon as 1 day after discharge (see https://www.peoplesbankmtg.
There are specific strategies you can use to rebuild your credit score and if you actively save the money that you had been spending on debt prior to your bankruptcy, you can be in an even better position to get a good rate when financing the purchase of your home. Let us know your situation and we can connect you with the best strategy for taking advantage of the fresh start you received from your bankruptcy discharge.
Posted on 4/27/2017 by Suren G. Adams, Attorney at Law, Adams Law Office, LLC
Should Christians file for Bankruptcy? As a Christian, I had to wrestle with this issue before deciding to take on my very first bankruptcy case back in 2004. I prayed and researched this issue and found the What the Bible has to say about Bankruptcyfollowing scripture:
Deuteronomy 15: 1-6. The Year for Canceling Debts.
At the end of every seven years, you must cancel debts. This is how it is to be done: Every creditor shall cancel the loan he has made to his fellow Israelite. He shall not require payment from his fellow Israelite or brother because the Lord’s time for canceling debts has been proclaimed. You may require payment from a foreigner, but you must cancel any debt your brother owes you. However, there should be no poor among you, for in the land the Lord your God is giving you to possess as your inheritance, he will richly bless you, if only you fully obey the Lord your God and are careful to follow all these commands I am giving you today. For the Lord, your God will bless you as he has promised, and you will lend to many nations but will borrow from none. You will rule over many nations but none will rule over you.
New International Version.
Similar to many of our laws in the U.S., the Bankruptcy Code parallels Biblical instructions with directions for canceling indebtedness. Prior to the changes in the Bankruptcy Code in 2005, you could receive a Chapter 7 discharge of indebtedness every 7 years. That has since been changed to every 8 years, but the underlying principle of debt forgiveness remains.
It is clear that God never intended His people to live under the stress and hopelessness of crushing debts. Obviously, He didn’t intend for this principal to be abused by racking up debts that you never intend to repay, but it contrary to His Word to believe that bankruptcy is wrong. In His mercy, it was provided as a blessing for His people so that they could receive a fresh start. We should not just embrace the parts of His Word that talk about the abundance He wants us to have, but rather we should embrace His whole Word including those passages that provide for hard times and His way out of them.
Posted on 4/10/2017 by Suren G. Adams, Attorney at Law, Adams Law Office, LLC
There are numerous benefits of creating a trust as your primary estate planning tool. Different kinds of trusts can help you avoid probate, reduce estate taxes, or set up long-term property management for you and your family, including family members who are minors or have special needs.
A revocable living trust (“RLT”) is a separate entity created for holding title to property for the benefit of a beneficiary. A revocable living trust is just that – revocable and changeable by the person who created it. A “living trust” (also called an “inter vivos” trust) is simply a trust you create while you’re alive, rather than one that is created at your death.
With a revocable living trust, you, the property owner are the Settlor, who creates and can amend the trust, the original Trustee, who manages and distributes the property held in trust, and the beneficiary until death, at which time, a Successor Trustee transfers the property to the successor beneficiaries. Control over the property remains with the owner(s) during life and the transfer of property after death occurs without probate.
One of the primary advantages of creating a living trust is that property left through the trust does not have to go through probate. In a nutshell, probate is the court-supervised process of paying your debts and distributing your property to the people who inherit it. The average probate takes 7-12 months before distributions are made. Property you transfer into a living trust before your death does not go through probate. If you have property in more than one state, a trust can eliminate the need for probate proceedings in multiple jurisdictions. The successor trustee — the person you appoint to handle the trust after your death — simply transfers ownership to the beneficiaries you named in the trust according to how you stated in the trust agreement. In many cases, the whole process takes only a few weeks. When all of the property has been transferred to the beneficiaries, the living trust ceases to exist.
A simple probate-avoidance living trust has no effect on taxes. More complicated living trusts, however, can greatly reduce the federal and/or state estate tax bills for people who own assets above the estate tax exemption. If your estate, including life insurance, is sizable and over the estate tax exemption amount ($3,000,000 for the Maryland estate tax and $5,490,000 for the 2017 federal estate tax), a credit shelter trust can save your beneficiaries tens of thousands of dollars in estate taxes. This specific tax-saving trust is designed primarily for married couples. It is also commonly called an “AB trust,” an “exemption trust,” a “marital life estate trust,” or a “marital bypass trust.” Each spouse leaves property, in trust, to the other for life, and then to the children or other beneficiaries.
Another benefit of a trust is that it is a private document. A will becomes a matter of public record when it is submitted to a probate court, as do all the other documents associated with probate — inventories of the deceased person’s assets and debts, for example. The terms of a living trust, however, need not be made public.
Some other benefits of trusts are that a trust can allow for great specificity with regard to distributions for beneficiaries, asset protection, retirement plan distribution planning to limit income taxes, provisions for special needs children, blended family planning, and provisions to prevent guardianship.
According to guidelines recently published by the Maryland Real Estate Commission on July 22, 2013, real estate agents are acting outside the scope of their license when negotiating short sales with mortgage lenders. The Commission specifically stated that “since the scope of the real estate license is limited by definition to assisting clients in the purchase, sale or lease of real property, the Real Estate Commission and the Commissioner of Financial Regulation consider that negotiation of a short-sale deficiency agreement or any other type of mortgage collection forbearance with a seller’s mortgage lender or servicer falls outside of the scope of a real estate license.”
Agents may still market and list a house for short sale, but should not act as a representative of the seller in discussions between the seller and the lender, to fall within the protection of their license and E&O policy. Agents are now required to inform sellers that the seller must either personally negotiate with the lender or hire a Mortgage Assistance Relief Service Provider or a Maryland attorney (such as Suren G. Adams, Adams Law Office, LLC) to conduct the negotiations. The full guidelines can be found by clicking here: MD Real Estate Commission Short-Sale Guidelines.
Posted on 5/22/2013 by Suren G. Adams, Attorney at Law, Adams Law Office, LLC
The primary reason that everyone needs an estate plan is that if you fail to create a plan, the State will create one for you. The State legislature does not know anything about your family dynamics and the things that you value, so why leave such important decisions to them? If you are a parent, you should be the person deciding who will take care of your children if something happens to you? You should also be the person to decide who gets your assets after you are gone and to decide when and how they should be distributed?
Without a will, state laws of “intestate succession” kick in. In Maryland*, the following distributions would apply if you died without a will:
- If survived by spouse and parents:
- ½ of estate, plus $15,000 to spouse
- Balance to parents
- If survived by spouse and children:
- ½ of estate to spouse; ½ to children
- If survived by spouse and adult children:
- ½ of estate, plus $15,000 to spouse
- ½ of estate to children (not including step- children)
- If no living heirs or step-children:
- Estate goes to the Board of Education
If the intestate laws do not precisely reflect your wishes, a will and/or a revocable living trust is necessary.
*See MD Code Ann., Estates and Trusts §§ 3–101 et seq. (2003) for a complete description of intestate distributions.
Another reason that everyone needs an estate plan is that a well planned estate is a valuable gift to your loved ones at a time when they will be least able to make important decisions. If you have ever had to suffer through the loss of a loved one, this is all too true for you. Your family should be able to focus on honoring your memory rather than figuring out how to pay bills when the bank will no longer allow access to accounts, or deciding who gets what assets.
A well planned estate also has the following benefits:
- Designate guardian(s) for your children
- Minimize time and complication of probate
- Potential to reduce taxes and fees
- Avoid court appointed guardianship
- Express your wishes regarding life support, etc.
- You decide the distribution of your property, rather than the government
Adams Law Office, LLC is a suburban Maryland and Washington, DC metropolitan law firm assisting clients with the development of a plan for the distribution of their property after death through individualized advice and preparation of applicable documents, such as wills, trusts, powers of attorney, and advance healthcare directives. Call 301-805-5892 for a free consultation.