Understanding the Steps of Foreclosure
Posted on October 1st, 2013
The process of foreclosure can seem like a hectic, rushed process where debtors are
uninformed and discriminated against. While the foreclosure process may seem like the quick
opportunity for lenders to turn properties and collect assets, it is a process that can take up to 9
months. Below are several of the stages of a foreclosure process in South Carolina.
1) Missed Payment Notices
The first stage is the receipt of missed payment notices. Most lenders provide a ten-day
grace period in processing monthly mortgage payments. However, receipt of payment
after the due date but within this grace period entitles the lender to add late fees which are
counterproductive to paying off your mortgage. In addition, late fees on mortgage payments
negatively affect the payment history component of your credit score and consequently lower
your overall credit score.
2) Notice of Default and Foreclosure
The next stage of foreclosure is the Notice of Default. Depending on the case, lenders can give
Notice of Default (NOD) statements as early as 30 days after a missed payment, however NODs
are generally sent after 3-6 months of delinquent payment. The NOD sets the final date to pay
off the entire balance of the mortgage and any additional late payments.
4) Summons and Complaint
South Carolina is a judicial foreclosure state. This means that a Notice and a Hearing in
court are required prior to the foreclosure sale. To initiate this process, the lender will
file a Summons and Complaint in the County in which the subject property is located. The
Summons and Complaint have to be served on the borrower. This means that the Summons
and Complaint must be either: 1) Given directly to the borrower; 2) Mailed to the borrower via
certified mail with a return receipt requested; 3) Left at the borrower’s usual place of residence
with someone more than 14 years of age; or 4) Served by publication in a local newspaper.
5) Period to Answer and the Importance of the Answer
The borrower has 30 days from the date of service of the Complaint to file her answer with
the Court. The importance of filing an Answer cannot be overstated. If the borrower fails to
file an Answer, the lender can move for a Default Judgment. The entry of a Default Judgment
allows the lender to foreclose based on nothing more than the borrower’s failure to answer
the Complaint. The entry of Default Judgment accelerates the foreclosure hearing process
(discussed later), which is the borrower’s only opportunity to be heard by the Court.
6) Discovery
If the Answer is timely filed, the Discovery process is commenced. Discovery is the legal
mechanism in which each side requests and produces to the opposing side any and all evidence
which it will use to prove its case to the Court. This includes, but is not limited to, testimony
from witnesses, documents, records, etc. The Discovery process is important in proving key
elements of the borrower’s case. For instance, the borrower may believe that the lender has
failed to credit her account with payments made.
7) Foreclosure Hearing
After the Answer is filed, the Court will set a date for the Foreclosure Hearing. This hearing is
typically held within 60 days after the Answer is filed. The Foreclosure Hearing is conducted
by a “Master in Equity” or a “Special Referee” depending on the County where the property
is located. At this hearing, the borrower and lender are given an opportunity to be heard.
Evidence may be presented at this hearing. At the conclusion of this hearing, the presiding
judge may enter a Judgment of Foreclosure or request the parties draft a memorandum about
the law and facts of the case. If, at the hearing or after reading the parties’ memoranda, the
Judge decides the borrower is behind and a foreclosure is appropriate, he will enter a Judgment
of Foreclosure. The borrower has 30 days after the Judgment of Foreclosure to appeal the
judgment.
8) Notice of Sale
After the Judgment of Foreclosure is entered, a sale date will be set. On this sale date, the
property will be sold by the judge at an auction conducted by the Court. The property will
be advertised in an appropriate newspaper once a week, for the three weeks immediately
preceding the sale.
9) Foreclosure Sale
The property is sold by the Court on the first Monday of the month following the
aforementioned 3 week period of advertisement. The property will be sold to the highest
bidder on the day of the sale, which is typically the bank who holds the mortgage. Immediately
following the sale, unless a deficiency is demanded by the Lender, the property must be
vacated by the borrower. If a deficiency judgment is demanded by the Lender, the sale remains
open for 30 days following the sale, after which the borrower must vacate the property.
10) Deficiency
A very important aspect of the foreclosure process is whether a Deficiency Judgment is
demanded. A Deficiency Judgment is a judgment entered personally against the borrower
which makes her liable to the lender for the amount owed to the lender if the home is sold
by the Court for less than the amount owed on the mortgage. If the Lender has demanded a
Deficiency Judgment, then the sale is held open for an additional 30 days. During this 30 day
period anyone can bid except for the winner of the initial sale. If there are no additional bids
during this 30 day period, the property will be sold to the highest bidder at the initial sale.
Need help?
Foreclosure can be a stressful and confusing process for individuals to go through. At Skinner
Law Firm we know the best way to deal with the foreclosure process is to be proactive. Waiting
to be served with a foreclosure complaint before taking any action only adds to the stress. If
your financial situation has created an inability to pay your mortgage or other debts, you should
seek help from an attorney immediately to maximize your chances of keeping your house and
other property.
Different Types of Business Bankruptcies
Posted on September 17th, 2013
Business bankruptcies can have lasting effects not just on the owner, but on employees as well.
Business bankruptcies can happen to any business at any time, so it’s important to know the different
types of business bankruptcy and how to handle them. Being informed ahead of time will allow you to
be prepared should your business face financial trouble.
Every business is different, and as such, bankruptcy for businesses is also varied. Common business
bankruptcies include:
Liquidation or Chapter 7 Bankruptcy
This type of business bankruptcy is utilized by small businesses that lack a reasonable ability to pay its
debts. A trustee is named to sell all of the assets owned by the business and the proceeds are used to
pay any debts. After the liquidation of assets, any debts that remain unpaid are eliminated. Chapter 7
bankruptcy filings can cost anywhere from $2,000 to over $5,000, so it is often an option used by small
businesses because other filing options can be more costly.
Reorganization or Chapter 11 Bankruptcy
This bankruptcy filing is generally used by larger companies that do not want to liquidate all of their
assets but instead have devised a reasonable plan to reorganize their business. This can be more
costly—anywhere from $10,000 to over $50,000. This option is utilized by companies that feel the
business will recover after reorganization.
Repayment or Chapter 13 Bankruptcy
This option is usually used for personal claims, but for a sole proprietor, the owner files a repayment
plan with the bankruptcy court explaining how the debts will be repaid. This type of bankruptcy filing
generally costs from $3,500 to $10,000, depending upon the complexity of the business and the nature
of the debts.
Filing bankruptcy for your business can be a confusing and stressful time. Remember Skinner Law Firm is
here to be a resource during uncertain financial times.
Stay Prepared for Financial Issues
Posted on August 28th, 2013
Randy Skinner was recently featured as a guest columnist in the Greenville News. To read his column, “Stay Prepared for Financial Issues” please click on the link below:
http://www.greenvilleonline.com/section/OPINION
Stay prepared for financial issues
Posted on August 15th, 2013
For some, financial distress arises after unforeseen medical expenses. One Harvard University study found that unexpected medical expenses accounted for 62 percent of bankruptcy filings in any given year.
Shifts in the economy can also create financial strain. An unanticipated layoff could also have personal finance implications. For others, financial pressure is the product of uncontrolled spending with little regard for a budget.
Identity fraud is another common cause of financial distress. If your financial assets are not properly protected, the results could be quite harmful.
While the causes may be different, preparing oneself against financial trouble is similar across the board. It is important to plan ahead — try to have a “financial cushion” equal to three months of income to have some funds available if an unanticipated situation should occur.
Equally important is creating a realistic budget. By creating a weekly, monthly or even annual budget (and sticking to it) you can hold yourself accountable and ensure that you are spending, saving and investing properly.
In some cases, trouble is inevitable. When trouble can’t be avoided, the first step is to consider all of your options. Is there any spending you might be able to cut? Is it possible to access money that may be tied up elsewhere?
After considering, but before exercising your options, seeking professional help is the next best step. Trained professionals are a valuable resource and can help anchor you in a time of financial uncertainty.
After the storm of uncertainty has passed and stability has returned, it is important to move forward in a way that will maintain your financial footing. It is essential to maintain a healthy relationship with creditors once your finances are settled so that you can rely on them in the future. Preserving the working relationship between clients and their creditors ensures that everyone is satisfied and feels confident to proceed.
Financial worries are not often a topic of casual conversation, but I understand the stress and emotional toll that these troubles can create. I have focused my career on helping others move away from financial trouble and toward financial stability and security. When your financial future is at stake, be sure to seek professional help early on; it can keep a bad situation from growing much worse and, in times of uncertainty, will serve as a resource, not just a resolution.
Skinner Law Firm Welcomes Jason Ward
Posted on August 6th, 2013
Skinner Law Firm, LLC is excited to welcome Jason M. Ward, Esq. to the firm as an Associate Attorney. A Rock Hill, SC native, Mr. Ward graduated from The University of South Carolina School of Law in May 2012 and joined Skinner Law Firm this past December. Having previously served at McCarthy Law Firm LLC, the U.S. Bankruptcy Court of S.C., and Bassi, Edlin, Huie, and Blum Law Firm in San Francisco, Ward brings a depth of experience in bankruptcy, real property, and contract law to Skinner Law Firm.
In addition, Ward is actively engaged with the American Bar Association, Greenville Young Lawyers Association, the South Carolina Bankruptcy Lawyer Association, the Black Law Students Association and the Department of Juvenile Justice. His professional involvement in these organizations further showcases his dedication to providing top-quality counseling to his clients, making him a perfect fit for Skinner Law Firm, LLC.
Is It or Isn’t It Covered? Personal Exemptions When Filing for Bankruptcy
Posted on July 26th, 2013
When filing for personal bankruptcy, many believe that creditors will lay claim to all of your possessions in order to repay debts. However, within the U.S. and South Carolina law books, there are a set of laws commonly referred to as “asset protection.” These laws are put in place to make sure that people who have filed for bankruptcy can maintain certain assets.
There are two key provisions of asset protection; what property can and cannot be protected and who is able to apply for exemptions.
US bankruptcy exemption law includes protection for:
- A percent of wages
- Social Security benefits
- Civil Service benefits (such as working for the U.S. Department of Foreign Affairs)
- Veterans benefits
Within South Carolina there are additional exemptions:
- Homestead (real property including co-op) or burial plot exemption up to $53,375 with joint-owners allowed to double exemption to $106,750
- Cash or liquid asset exemption up to $5,625 in lieu of the homestead exemption
- Motor vehicles exemption up to $5,625
- Tools of trade (items necessary for employment) exemption up to $1,675
- Jewelry exemption up to $1,125
- Wild Card (any property from unused exemptions for homestead, burial, motor vehicle, personal property, or tool of trade exemptions) up to $5,625
An individual debtor must have an ownership interest in the property in order to claim any of the above excemptions.
Exemptions for alimony, child support, disability services, pensions, and life insurance are handled on a case by case basis. For any additional information on what exemptions you may qualify for, please contact Skinner Law Firm LLC.
4 Internal Causes of Small Business Bankruptcy
Posted on July 11th, 2013
For small businesses, there are many factors which can lead to bankruptcy. A large number of these factors are out of the business’s control, such as external market conditions, poor company location or a small customer base. However there are certain internal operations, which when poorly executed, can lead to bankruptcy.
1) Insufficient Planning
Many small businesses begin as the life-long dream of a professional who decides to leave the corporate world. Before opening a small business, potential owners should calculate start-up costs, as well as an operational budget for the first year. Owners should also plan for worst case scenarios, such as initial low business, potential slow seasons and unforeseen accidents.
2) Low Savings
Sufficient planning is as important as having the proper savings for opening and operating a small business. Owners should be prepared to have a proper cash cushion to keep the business afloat in emergency situations. It is recommended that owners set aside six months of savings for both the business and themselves before opening.
3) Lack of Financial Discipline
When businesses are faced with low income they sometimes turn to cheap, quick-fix schemes to generate business. Unfortunately, these frequently prove to be ineffective and a waste of precious capital. The costs of these quick-fix schemes often require additional loans which only increase the business’ risk of bankruptcy.
4) Poor Accounting
In an effort to save money, some businesses will steer clear of bookkeepers in favor of balancing the books themselves. Accounting is often pushed aside amidst seemingly more important elements of the business, leaving owners in the dark about their true financial state. Ideally, business accounting is the responsibility of one employee who can set aside time to communicate the business’ financial status to the company owner.
For more information about the causes of small business bankruptcy or how to responsibly plan for your small business, please contact Skinner Law Firm LLC.
Understanding Your Credit Score
Posted on June 24th, 2013
At first glance, credit scores can seem confusing and difficult to interpret. The commonly used FICO credit score, named after Fair Isaac Corporation, is based on a scale from 300 to 850 with the median FICO score falling in the 720-725 score range. But how are those scores calculated? FICO scores are comprised of five components: payment history, credit utilization, credit age, mix of credit and recent credit. The following are general guidelines for how each component is calculated and valued in an overall credit score.
Payment History (35%)
Payment History measures the timeliness in which various credit bills such as mortgages, credit card bills and auto loans are paid.
Bills paid on time can help improve credit score, while late bills can adversely affect credit score.
Credit Utilization (30%)
Credit utilization is the ratio of current debt to the prescribed limit of debt.
By limiting the amount of purchases paid with credit, the credit utilization ratio will drop, thus improving your score. Additionally paying off debts will lower the ratio and improve credit score.
Credit History (15%)
Credit history measures how long an individual has been with a certain credit company.
Longer credit histories improve credit score. Longer histories show the reliability of customers who pay their credit bills.
Credit Mix (10%)
Credit mix is determined by looking at the four different types of credit used: installment, revolving, consumer finance and mortgage. When determining credit score a more diversified credit mix tends to help improve credit score.
Installment credits – Have a fixed number of payments (i.e. student or automotive loans)
Revolving credits – Do not have a set number of payments (i.e. credit cards)
Consumer finance credit – Nontraditional loans (i.e. microfinances, pawns, or moneylending)
Mortgage credit – Used whenever a loan is secured through real property and a mortgage note.
Recent Credit (10%)
Recent credit measures how frequently an individual has looked for credit over a specific amount of time.
Generally, aggressive searches for credit or “rate shopping” can hurt credit scores.
While there is a rough formula for how credit scores are calculated, keep in mind that each credit score is case specific. For more information on credit scores or how to increase your credit score, please contact Skinner Law Firm LLC.
4 Causes of Personal Bankruptcy
Posted on June 7th, 2013
Skinner Law Firm is dedicated to providing you with solutions to the problems that lead to personal bankruptcy. Filing for bankruptcy can come with the stigmas of over-spending and poor financial planning, but we realize that this is not always the case. The following are four major causes that lead to personal bankruptcy filings and how to best avoid these situations.
1. Unforeseen Medical Expenses
A study from Harvard University stated that unforeseen medical expenses were the cause of 62% of bankruptcy filings in a given year. While you cannot always plan for these expenses, we encourage our customers to have a prepared financial budget and proper insurance. Insurance plans can be costly, but having sound coverage can be beneficial if unexpected medical expenses begin to add up.
Creating an emergency monetary fund is the best way to avoid this situation. These cash or liquid funds should be created to cover three months to a year of living expenses.
2. Shift in Income
Job loss, disability placement, divorce or death can shift a household’s income dynamic and put a person at risk of bankruptcy.
Creating an alternative plan to cover expenses ahead of time can help you avoid filing for bankruptcy.
3. Uncontrolled Spending
Uncontrolled spending still remains a major cause of bankruptcy filings. Skinner Law Firm encourages our clients create and maintain a budget so they are equipped to better manage their money in the future.
One of the best tips we can offer is to use cash for necessary purchases. Smaller charges for items such as groceries can quickly add up and be damaging to your bottom line.
4. Identity Protection
Protection against identity theft is critical in preventing bankruptcy filings. While banking or online shopping, make sure sites where you enter personal information begin with “https://” instead of the normal “http://.” The “s” should always make you think “security”.
Both paper and online identity theft still remain a national issue can be prevented by shredding old credit cards or documents with personal information