Drug Offenses

If you have been charged with a drug offense, contact an experienced Utah drug attorney immediately. Time is of the essence. Do not attempt to convince the arresting officer. Anything and everything that you say can and will be used against you in the court when your case comes up for trial. It’s best to remain silent and ask that you be allowed to speak to your attorney.

Which drugs are illegal?

At last count, dozens. The laws of Utah list the drugs that are always illegal within its borders, regardless of whether the drug is possessed, purchased, or sold. Each state also lists the drugs that are illegal unless prescribed by a physician. In addition, federal law prohibits the possession, purchase, and sale of many types of drugs. State and federal laws usually refer to illegal drugs as “controlled substances”; the older term is “contraband.” If someone you know has been arrested by the police for possession or trafficking of drugs, contact an experienced Utah attorney immediately.

Drug crimes are a serious offense.

Strictly speaking, “drugs” are substances used for the diagnosis, cure, treatment, and prevention of a disease or physical or mental condition. “Narcotics” are substances that dull the senses and become addictive after steady use. “Inhalants” are narcotics, and their use as narcotics is illegal. When inhaled, they rob the body of oxygen and can cause brain damage. Spray paint, hair spray, paint thinner, and bug killers are the commonest types.

Most states including Utah group drugs and narcotics into categories established under the federal Uniform Controlled Substances Act. They are categorized according to their potential for harm in contrast to their possible medical benefits. For example, “Schedule I” drugs have no beneficial medical use; they are always harmful. Heroin and LSD are Schedule I drugs. Schedule II drugs include cocaine, opium, and amphetamines. Because Schedule I drugs have no beneficial use, the penalty for possessing and selling any of them is the severest.

There are three types of crime: infractions, misdemeanors, and felonies. Felonies are the most serious type of crime. Felony crimes include rape, assault, and burglary. Though drug possession can be classed as a felony, this is usually only in cases where an individual is found to have a large quantity of illegal drugs in their possession or depending on the nature of drugs involved. A drug conviction will remain on your record and will adversely affect your life. You will find it difficult to get a job or rent an apartment. If you have been arrested for a drug crime, your first course of action should be to speak to an experienced Utah drug attorney.
Under Utah law, drugs are grouped into Schedule I, II, III, IV & V. Possession of Schedule I and II drugs are a third degree felony. Possession of Schedule III, IV and V drugs are a class B misdemeanor. If you are convicted of a third degree felony, you could face up to 5 years in prison and a fine up to $5000. A class B misdemeanor conviction can result in a jail term up to 6 months and a fine up to $1000.

A third degree felony can result in up to 5 years in prison and a fine up to ,000 whereas a class B misdemeanor conviction can result in up to 0-6 months’ jail time and up a $1,000 fine. Repeat offenses can have serious consequences. For example, a class B misdemeanor rises to a third degree felony upon repeated charges.

Possession of a controlled substance

Possessing a controlled substance isn’t always a crime. Utah and federal laws only prohibit persons from “knowingly or intentionally” possessing illegal drugs. Being innocently in possession of a controlled substance usually isn’t sufficient to support a criminal conviction. For example, if a person receives a package in the mail that contains drugs, the person can only be convicted of illegal possession if it is shown that he or she knew the drugs would be delivered and intended to take possession of them. Of course, it isn’t illegal for a person to possess certain drugs if they have been prescribed by a doctor for that same person’s illness or injury.
Purchasing a controlled substance is a different offense from possessing a controlled substance. A suspect can be charged with both acts in connection with a single incident. Selling controlled substances and manufacturing them are also criminal acts. An adult who is convicted of either offense can receive a prison sentence of up to 5 years and be fined as much as $5,000 for the first offense in Utah.

Giving drugs to another person is a criminal act. Under Utah law, the “sale” of a controlled substance includes giving a drug to someone. It’s not necessary to receive something in exchange. This means that cash doesn’t have to change hands for a drug sale to occur.

Quantity Of Drugs

The seriousness of a drug offense depends on the quantity of drugs the suspect possesses or sells. Possessing a small quantity of marijuana is usually a misdemeanor, but possessing large amounts of any illegal drug is a felony. When someone is caught with a cache of controlled substances, most criminal courts presume that the individual intended to sell them. To beat a “trafficking” charge, you must present strong evidence to overcome or “rebut” the court’s presumption. But even if the trafficking charge is successfully rebutted, you might still face a charge of illegal possession.
Obviously, trafficking in large quantities of drugs or narcotics is a serious offense, particularly if the substances cross state lines.
The police can personally search a minor for drugs. The police can search anyone who is under arrest. Furthermore, they can stop and frisk anyone for drugs and narcotics, and also weapons.

Most drug statutes make it a crime to knowingly manufacture or deliver or possess with intent to manufacture or deliver controlled or counterfeit controlled substances. Controlled substances include, among other things, heroin, cocaine, morphine, methamphetamine, LSD and marijuana. Possession of controlled or counterfeit controlled substances may be actual physical possession or “constructive” possession. Constructive possession means that possession will be implied if the defendant has the intent to possess the illicit substance and maintains control and dominion over the premises where the controlled substances are located. The mere presence of controlled substances on defendants’ premises is not enough, however, particularly if it is a location that is well traveled or occupied by others. There must be sufficient proof that the defendants had knowledge of the presence of the controlled substances and intended to possess the substances even though they may not have been in their physical possession. Thus, if the controlled substances are located in an area of the defendants’ home or car, where they have exclusive dominion or control, this may constitute possession by the defendants, by virtue of the location of the drugs on the defendants’ private property.

In drug-dealing cases, if defendants are apprehended before the actual delivery of the controlled substance, proof of intent to deliver controlled substances is generally demonstrated by circumstantial evidence. The most compelling circumstantial evidence on this issue is the amount of controlled substance defendants have in their possession at the time of arrest. The larger the amount, the more likely it is that the defendants intended to deliver some portion of it to others, rather than keeping it for personal use. Even if the defendants possess a small amount of the controlled substance, they can still be convicted of possession with intent to deliver, but much more circumstantial evidence will be necessary. Thus, in addition to possession, the government might be required to produce evidence of contacts or appointments made for purposes of delivering the controlled substances. Other circumstantial evidence of possession with intent to deliver might include the type of packaging used for the controlled substance, large sums of money or weapons in the defendants’ possession or the presence of other drugs or drug paraphernalia in the area.

If there is insufficient evidence of intent to deliver, then defendants can still be charged with the lesser offense of possession of a controlled substance. Simply proving that the defendants had knowledge of the controlled substance and that it was in their immediate and exclusive control is sufficient for a charge of drug possession. Note here again that knowledge of the controlled substance alone is not enough. The defendants must also have immediate and exclusive control over the controlled substance. Just as in the case of possession with intent to deliver, simple possession of a controlled substance may either be actual or “constructive.”

Interestingly, most drug offense statutes also make it crime to possess with intent to deliver or merely possess counterfeit controlled substances. At first glance, this seems an unusual criminal offense because counterfeit substances don’t cause any real social harm. Nonetheless, one rationale for these provisions is that they allow the government to bring cases against defendants in instances when undercover officers pose as drug purchasers and buy counterfeit controlled substances instead of the “real thing.” Without statutes outlawing delivery or possession of counterfeit controlled substances, the drug seller could not be prosecuted because what he sells the undercover officer is not actually a controlled substance as defined by the statute. A similar result would occur if the officer arrests an individual for simple possession of drugs only to later discover after testing that the drugs are in fact counterfeit.

One of the major difficulties associated with prosecuting defendants for delivery or possession of counterfeit controlled substances involves distinguishing between possession of innocent substances and possession of counterfeit controlled substances. In other words, how can the police tell whether the defendant intended to possess counterfeit cocaine or was merely possessing an “innocent” substance such as flour? Generally, the counterfeit substance must be packaged and presented in such a manner that a reasonable person would believe that using the product would produce an effect similar to that of the actual controlled substance. Some factors that will be considered when charging the defendant with delivery or possession of counterfeit controlled substances include the type of storing and packaging used for the counterfeit substance, any representations made by the defendant as to the nature of the substance, and whether the defendant was attempting to exchange the counterfeit substance for something of value. Further, to avoid dismissal of the indictment for failure to charge the appropriate crime, it is no defense to a charge of selling counterfeit controlled substances that the defendant thought they were actual controlled sub stances. This means that a defendant who may have been misled as to the authenticity of the substances will not be able to escape prosecution.

Finally, the penalty provisions for drug offenses typically impose lengthier sentences depending upon the amount of controlled or counterfeit controlled substances manufactured, delivered or possessed by the defendant.

Justice Reinvestment Initiative

The State of Utah has adopted an initiative called the Justice Reinvestment Initiative. Under this initiative, the courts are encouraged to provide opportunities for recovery instead of incarceration. As a result, you may not receive jail term for your drug offense and you may instead be provided with an opportunity for recovery. Speak to an experienced Utah drug attorney to know if you qualify for this initiative.

Utah has something similar to the Three Strikes law although it is not officially called the Three Strikes law. It substantially increases the penalties for a third offense in certain felony and misdemeanor cases. For example, if a newly convicted felon had a criminal record of two prior felony convictions, the judge was obligated to impose the maximum sentence for the third crime. Three strikes laws are intended to remove repeat offenders from society, and prevent them from committing further crimes. Unlike traditional sentencing, where judges can use personal opinion to give harsher or more lenient sentences, mandatory sentencing does not allow personal opinion to affect the punishment that is handed down.
The State of Utah has harsh penalties when it comes to drug crimes. Speak to an experienced Utah drug attorney to know how you can fight the drug charges against you.

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When you need to defend against drug crimes in Utah, please call Ascent Law LLC (801) 676-5506 for your Free Consultation. We want to help you.

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

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If you are facing a criminal trial, speak to an experienced Orem Utah criminal defense lawyer. In every criminal trial, the government is constitutionally required to prove its case against the defendant beyond a reasonable doubt. Additionally, defendants in criminal cases have a constitutional right to be free from compelled self-incrimination. Taken together, these concepts mean that in criminal cases, the government must independently investigate, obtain and present evidence against defendants. Criminal defendants are not required to speak or otherwise respond to the government’s case against them, and the government shoulders the entire responsibility for proving its case.

Notwithstanding these prosecutorial responsibilities and constitutional protections, many criminal defendants voluntarily choose to present evidence during a criminal trial in response to the government’s case. Such evidence might challenge the government’s case-in-chief and/or attempt to present an excuse or justification for the defendant’s behavior. Evidence challenging the government’s case-in-chief will usually seek to demonstrate that the government does not have sufficient evidence to prove one or all of the material elements of the crime (i.e., the act, the mental state, causation and social harm) beyond a reasonable doubt. In challenging the government’s case-in-chief, a defendant might also introduce evidence designed to prove that the government has charged the wrong person. This is known as an “alibi” defense, and the defendant will typically present evidence in the form of witness testimony that establishes that he could not have committed the crime because he was elsewhere at the relevant time of the offense. Finally, a defendant may also counter the government’s case-in-chief evidence by vigorously attacking the accuracy and credibility of government witness testimony. By using these strategies, a criminal defendant is essentially challenging the government to meet its constitutional burden and prove its case beyond a reasonable doubt. But if a defendant is under no obligation to present a defense or even speak during a criminal trial, why would any defendant voluntarily choose to present a defense? Why not simply remain silent and put the government to its proof?

One reason may be that the defendant is innocent of the offense charged and wishes to present his or her story to the judge or jury. While the government has an obligation to collect evidence and prove its case, it is certainly under no obligation to present evidence favorable to the defendant during the trial. Another reason may be that the prosecution has amassed a compelling amount of evidence pointing to the defendant’s guilt, and the defendant believes it would simply be too risky to allow that evidence to be offered at trial without challenge. Finally, in the face of overwhelming evidence of guilt, the defendant may wish to present evidence that his or her conduct at the time of the offense was either justified or should be excused. A defense offered to justify or excuse the defendant’s conduct is known as an affirmative defense. By presenting an affirmative defense, the defendant is admitting that he or she engaged in the conduct charged, but is offering an excuse or justification for the behavior. In other words, the defendant is arguing: “Yes, I did it, but I have an (excuse and/or justification) for my conduct.” When offering an affirmative defense, courts have determined that it is fair to place the burden of proof on the defendant because the defendant is raising the defense and is likely to have the most relevant evidence available to support the defense. Affirmative defenses are controversial because the defendant admits engaging in the conduct charged, but is asking to be partially or completely relieved of responsibility or punishment. Yet, many of these defenses remain popular precisely because, for defendants, they represent an opportunity to secure an acquittal or at least a reduced punishment despite the admission of responsibility.

SELF-DEFENSE

If believed, a defense of self-defense presents a complete justification for the crime charged. This means that if the judge or jury believes that the defendant acted in self-defense, he will be completely acquitted of the criminal charges. Self-defense is typically presented in criminal trials when the defendant has been charged with murder or manslaughter. When presenting this defense, the defendant essentially argues that he used reasonable force to defend himself from an imminent unlawful attack and that he reasonably believed that such force was necessary to repel the attack. Depending upon the nature of the imminent unlawful attack, in some instances self-defense will permit the use of deadly force. Deadly force is force by whatever means that is highly likely to cause death or serious bodily injury to the victim.

Defendant as Aggressor

To properly raise a defense of self-defense, a defendant cannot be the aggressor. This means that the defendant cannot instigate an altercation and then claim self-defense when the victim of his attack responds to his aggression with force.

Under the law of self-defense, a person who is the aggressor is not entitled to use deadly force to repel an attack unless he first retreats and gives an indication that he is no longer a threat to the victim. If the victim persists in responding to the aggressor after the aggressor retreats, then the aggressor may respond with deadly force.

There are at least two ways a defendant can become the aggressor. First, as in the example, a defendant who starts an altercation is considered the aggressor and may not claim self-defense if his aggression is met with deadly force unless he first retreats. Second, a person who escalates an encounter can become the aggressor. So, for example, if an encounter begins with the use of nondeadly force by the aggressor, and the victim responds with deadly force, the victim, by responding with deadly force, becomes the aggressor because he has escalated the encounter to the level of deadly force. The person who escalates the encounter would not have a valid self-defense argument since it is almost never considered reasonable to use deadly force in response to a nondeadly attack.

Retreat

A person who instigates an encounter by using deadly force must first retreat before using deadly force to defend himself from a responsive deadly force attack by the victim. In some jurisdictions, the retreat doctrine is much broader, such that a victim who is initially threatened by an aggressor with deadly force must “retreat to the wall” before he may respond with deadly force. This means that the victim of an imminent, unlawful and deadly attack must do everything possible to avoid using deadly force, although he does not have to go so far as to place himself in greater danger (e.g., running into a busy intersection to avoid a gun-wielding aggressor). Also, a victim of a deadly attack does not have to retreat in his own home. The law does not force a person to flee the safety of his home in order to avoid an unlawful attack. The “retreat to the wall” doctrine is used in only a few jurisdictions, and most continue to adhere to what is known as the “hue man” rule, which means that a person threatened with deadly force can stand his ground and respond with deadly force.

DEFENSE OF OTHERS

A person may use reasonable force to defend another person who is the victim of an unlawful attack. If the victim is threatened with or subjected to the use of deadly force, then the person coming to his defense may use deadly force in response. Problems arise when the person coming to the aid of a victim misinterprets the situation and uses force that is inappropriate under the circumstances. For example, a person may encounter two people engaged in a physical altercation and decide to step in and use deadly force to defend one of the parties. If it turns out that the victim of the attack would not have been entitled to use deadly force, then the person coming to his assistance would not be justified in using such force either, regardless of his perception of the situation. In this instance, the person offering assistance is said to “stand in the shoes” of the victim, and if the victim would not have been able to use deadly force during the encounter, then any person coming to his assistance will not be entitled to use such force either. Indeed, the person offering assistance may be criminally liable if his unjustified use of force results in harm to another.

DEFENSE OF PROPERTY

Deadly force may not be used to protect property under any circumstances. The reason for this is simply that human life should be valued over real or personal property. Nonetheless, some jurisdictions have enacted “make my day” laws. These controversial statutes allow homeowners to use whatever level of force is necessary against intruders who enter the home and threaten to use any type of force against the homeowner or anyone in the home. Although these statutes do not permit the homeowner to use force merely to protect his property, they do allow the homeowner to insure safety within his home when someone enters the home with the intent to use force against him or other occupants in the home.

INTOXICATION DEFENSE

A defendant may use a defense of voluntary intoxication to prove that she did not have the necessary intent to commit the crime charged. When presenting this defense, the defendant is claiming that her mind was so affected by drugs or alcohol that she could not form the required intent to commit the crime or, in some cases, could not perform the voluntary act required by the criminal statute. The intoxication defense is very controversial because of the general belief that a voluntarily intoxicated person should be responsible for the consequences of her actions.

Nevertheless, in many jurisdictions, the defendant’s state of voluntary intoxication may serve as a defense if it prevents her from forming the necessary intent to commit a particular offense. The defense is sometimes limited, however, and in some jurisdictions the defendant may only present a defense of voluntary intoxication when charged with crimes that require specific intent. So, for example, if a defendant is charged with the crime of larceny (a specific intent crime), she may present an intoxication defense to show that, because of her intoxication, she could not form the specific intent to steal. The theory is that while the defendant might be generally aware of her conduct, her mind is too clouded by alcohol or drugs to think about and form the specific intent to permanently deprive the owner of the property as required by the larceny statute.

Even when limited to demonstrating lack of specific intent, the intoxication defense is still very controversial. As indicated earlier, the controversy is based, in part, on the fact that the law should strongly discourage individuals from becoming intoxicated to the point of engaging in criminal conduct. Allowing an intoxication defense, even in limited circumstances, significantly interferes with this deterrence objective. There is also a realization that rather than preventing the formation of intent to commit a crime, alcohol may indeed embolden some individuals to engage in criminal activity. For these reasons, a few jurisdictions have completely eliminated the defense of voluntary intoxication even for crimes that require proof of specific intent. Again, the theory is that defendants who become voluntarily intoxicated should be responsible for the consequences of their actions.

Involuntary intoxication, however, remains a valid defense to criminal conduct. Involuntary intoxication can occur, for example, when a person erroneously takes more than the proper dosage of medication or becomes unusually and unexpectedly intoxicated by an amount of alcohol that would not have such an effect on the average person. Under such circumstances, if the intoxicated state is truly involuntary and unexpected, then the person is not considered responsible for any resulting criminal conduct because, in fact, the person did not act voluntarily and/or with the necessary mental state.

An experienced Orem Utah criminal defense lawyer can assist you fight the criminal charges against you. Depending on the circumstances of your case, you may have defenses available.

Orem Utah Criminal Defense Lawyer Free Consultation

When you need legal help to defend against criminal charges against you, please call Ascent Law LLC (801) 676-5506 for your Free Consultation. We can help you with DUI charges. Theft Charges. Assault.
Battery crimes. Sex crimes. Drug Crimes. And Much More. We can even help you expunge your criminal record when everything is done and over – so long as you qualify. We want to help you.

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West Jordan, Utah
84088 United States
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How Long After Loan Modification Can I Buy A House?

How Long After Loan Modification Can I Buy A House?

In most cases, you can get a mortgage to buy another house after a loan modification as long as you haven’t missed any payments over the previous 12 months, depending on the specifications of your lender. But you need to know how your original loan was modified. If you had any principal balance forgiveness or write-down on your mortgage, you may not qualify for a conventional mortgage loan. But there are other ways to get a mortgage with a low credit score. To a degree, it depends on the kind of modification plan you are in. If you are in a private modification, you should contact your servicer when you suspect that you will be having trouble making payments the sooner the better. Negotiating a new modification may or may not be possible; please know that the servicer’s role is to try to negotiate the most favorable outcome for the owner of the loan, and is not under any legal obligation to offer you new terms and conditions.

However, they do need to review your situation and provide clear information about your rights and any appropriate timelines. If you’re in an old FHA-HAMP, that program is still active and you may be able to get a new modification after a trial payment plan period has been successfully completed. The old HAMP program (discontinued 12/31/2016) has been replaced by a new Flex Modification program. According to it is noted that borrowers who previously modified their loan through HAMP (or any of the predecessor programs) are eligible for a Flex Modification if the mortgage loan meets all of the eligibility requirements for the Flex Modification Program (including but not limited to the following):

• The mortgage loan must be delinquent or in imminent default

• The mortgage loan must not have been modified three or more times, regardless of the loan modification program

• The mortgage loan must not have received a Flex Modification and become 60 days or more delinquent within 12 months of the modification effective date without being reinstated.

• The borrower must not have failed a Flex Modification Trial Period Plan within 12 months of being evaluated for eligibility for another Flex Modification.

To get started, you’ll want to contact the servicer of your loan. Look on your mortgage statement for contact phone numbers or website locations; some may have special numbers or site locations for borrowers having trouble with their loans. Talk to them as soon as you can and see what relief they might be able to offer you. You can get a mortgage after you have done a loan modification. Loan modifications were quite popular starting in 2009 through 2013. You are not seeing nearly as many since the beginning of 2014. Depending on what you did to your loan when you modified it depends on how long you have to wait if at all, after the loan was modified. A loan modification is when you change your current mortgage without refinancing it. A loan modification is usually done by the current company who is servicing the loan.

A loan (mortgage) is considered modified if any of the following have occurred: lowering of the interest rate, increasing the term of the loan, converting to a fixed rate or reducing the balance of the mortgage. All of these modifications will result in a lower payment. If you went ahead a only lowered the interest rate or converted it to a fixed rate, than you should be able to qualify for a new mortgage right away, no waiting period. If you reduced the balance of the loan than you will have to wait at least 1 yr possibly more. Increasing the term of your loan will also result in at least 1 yr possibly more. The good news is most loan modifications that were done only adjusted the rate. Loan modifications were done to try to help people stay in their current homes. The person could have had a loss of income or a job loss. Maybe they could not afford the mortgage payment after it had adjusted, sometimes as much as 7% higher. Then there were customers who were just mad that their value had dropped. If you are going to apply for an FHA or VA loan then most lenders are going to require a minimum of 3 yrs. after your loan modification was completed. There are a couple of lenders that will allow anywhere from 1-2 yrs after a loan modification is completed.

The loan modification must be complete. It cannot be in a trial phase and there must be a new note. If you have late on your new modified mortgage, almost all lenders will require a 12 month waiting period from the date of the last late. A lot of lenders also look for perfect credit after a loan modification. If you had a loan modification you can buy a new home or refinance your existing home. One of the challenges many homeowners faced in the recession was financial hardships. Loan modifications were often a short term solutions banks used for homeowners facing delinquency, income changes, or loss of home-equity. Each loan modification was different, but the most common form of loan modification involved simply a reduction in the mortgage payment.

General conventional mortgage loan guidelines require you to have 24 months of payment history on the subject property you’re looking to refinance since the date of the modification or 12 months of payment history if you trying to finance the non-subject property. Put another way, if you had a loan modification on a house 12 months ago, but are looking to finance another property, you should be in the clear. The subject property is the property in question that you’re looking to get a new mortgage on. If you have had principal balance forgiveness, also called a write-down, you are going to be ineligible for most conventional mortgage loans. If you’re loan payment was reduced only and you have the 12 months or 24 months payments rating you’re eligible for financing. The mortgage holder that did the modification will typically report ‘restructured or modified mortgage‘on your credit report. In the event you have a modified mortgage, but the credit report does not indicate so, this could be a golden ticket. Lenders work off the credit report. You will need to provide a copy of the original modification terms specifically detailing the modification if you have a modification in your past. Some lenders who have provided loan modifications to borrowers have different interpretations of what Fannie Mae and Freddie Mac consider to be a modified or restructured mortgage. This is something that can work in your favor. Most, but not all loan modification involved you signing new paperwork detailing the specifics of your loan restructuring with your mortgage loan servicer.

If your loan was changed, but you did not sign any paper work, you’re loan may report normally to the credit bureaus wherein documenting the loan modification need not be necessary, nor would you be subject to the waiting times. Most banks that originate, bundle and sell loans to the secondary market operate off the same guidelines regarding waiting times. In many situations bigger banks have what are called investor overlays that add another layer of scrutiny to a loan that may not necessarily need it, but are place to insure less risky loans. If you’ve been turned down before based on the previous loan modification situation you owe to yourself to obtain a second opinion. Mortgage banks that deal directly with Fannie Mae and Freddie Mac may be more viable source for securing a loan than a bank whose credit guidelines are in place to benefit shareholders rather than consumers actually borrowing the money.

Understanding Home Equity Loans and Credit Lines

Home equity loans can be an affordable way to tap the equity in your house to use for home improvements, pay for education and pay off credit cards or other types of debt. They are considered second mortgages because they are secured by your property and typically have lower interest rates than non-secured loans. Formerly, the interest paid on these loans, used for personal items, was tax deductible. However, with the advent of the Tax Cuts and Jobs Act, the interest will only be deductible if the loans “are used to buy, build or substantially improve the taxpayer’s home that secures the loan,” as stated by the Internal Revenue Service.

Two Loan Types

• Home Equity Loans

• Home equity line of credit (HELOCs)

There are two types of home equity loans. The first is a loan of a set amount of money financed for a set period (usually five to 15 years) at a fixed interest rate and with a fixed payment. The second type is called a home equity line of credit (HELOC).

A HELOC has a variable interest rate and functions more like a credit card with an expiration date (often up to 10 years after the line of credit is taken out). You can run into trouble with either type of home equity debt if you have serious financial problems, lose your job or experience an unexpected illness. A further complication of a HELOC is the stark contrast between the initial phase (“draw” period), when you have access to the line of credit and may have to pay only interest on the money you borrow, and the second (much more costly) “repayment” phase, when the line of credit expires and you must begin repaying both principal and interest on your remaining balance.

Defaulting on a home equity loan or line of credit could result in a foreclosure. What the home equity lender actually does depends on the value of your home. If you have equity in your home, your lender will likely initiate foreclosure, because it has a decent chance of recovering some of its money after the first mortgage is paid off. The more equity, the more likely your second mortgage lender will choose to foreclose. If you are underwater (your home is worth less than the combined amount owned on both the first and second mortgages), your home equity lender may be less likely to foreclose. That’s because the first mortgage has priority, meaning that it’s likely that the second mortgage holder will not receive any money after a foreclosure. Instead, the second mortgage holder will choose to sue you personally for the money you owe. While a lawsuit may seem less scary than foreclosure proceedings, it can still hurt your credit, and lenders can garnish wages, try to repossess other property or levy your bank accounts to get what is owed. Most mortgage lenders and banks don’t want you to default on your home equity loan or line of credit, so they will work with you if you are struggling to make payments. Should that happen, it’s important to contact your lender as soon as possible. The last thing you should do is try to duck the problem. Lenders may not be so willing to work with you if you have ignored their calls and letters offering help. When it comes to what the lender can do, there are a few options. Some lenders offer to modify your loan or line of credit. Bank of America, for example, will work with borrowers by offering to modify the terms, interest rate, monthly payments or some combination of the three to make the loan or HELOC more affordable. To qualify for Bank of America’s loan or HELOC modification, borrowers must meet certain qualifications:

• They must have had the loan for at least nine months.

• They must not have received any kind of home equity assistance in the last 12 months or twice in the last five years.

• They must be undergoing financial hardship.

• They must be able to repay the loan.

Other private lender which offers student loans work with a borrower who is struggling to meet payments by offering multiple deferments and forbearance options. Home equity loans and lines of credit can be an inexpensive way to tap the equity in your home. If you find yourself in trouble, you do have options. From lender workouts such as a loan modification to limited government help, there are ways to get out from under a home equity or HELOC problem without going into foreclosure. The key in all options is to get help right away instead of hoping the problem will disappear on its own.

Loan Modification Lawyer Free Consultation

When you are behind on your mortgage and you need legal help, please call Ascent Law LLC (801) 676-5506 for your Free Consultation. We can help you with real estate law. Mortgage Law. Loan Modifications. Bankruptcy. And Much More. 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

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When you are purchasing real estate, you should always hire an experienced Herriman Utah real estate lawyer who can act as your local counsel. The lawyer can assist you all the way. The lawyer can review your financing options and assist with the documentation.

Ordinarily a home buyer cannot obtain a loan which represents the full amount of the purchase price in any kind of transaction; the purchase of a home is no exception. A down payment is required as a manifestation of the good faith and serious intentions of the borrower and to provide a margin of safety, that is, of value of collateral over debt, for the lender.
The importance of this arrangement to an understanding of the market for homes in fee lies in the fact that, in general terms, credit multiplies the purchasing power of the down payment by a factor which is the reciprocal of the ratio of down payment to the total purchase price. If credit were extended in the full amount of the purchase price, purchasing power would be limited only by the amount which the prospective homeowner could borrow; where no credit is available, purchasing power is limited by the prospective owner’s own resources. If the down payment represents one-half of the purchase price and the other half can be borrowed, the purchasing power of the down payment is multiplied by two; if one-third, by three, etc.

In financing homes, the ratio of the mortgage amount to the purchase price is less frequently used as a criterion by which the mort gage amount is determined than the ratio of the mortgage amount to the appraised value of the home, referred to as the “loan-value ratio.” Most lenders, however, attempt to limit their appraisals to the purchase price, or less, and their loan to a certain percentage of that appraisal. The effect of increasing the loan-value ratio — especially as it approaches 100 percent — upon the purchasing power of the down payment is not generally appreciated. Increasing the loan value ratio from 50 to 75 percent, or from 60 to 80 percent, doubles the purchasing power of the down payment, as do increases from 80 to 90 percent or from 90 to 95 percent. Thus, increasing the loan-value ratio from 60 to 95 percent enlarges the purchasing power of the down payment eightfold. Successive increases in the loan-value ratio multiply the purchasing power of the down payment so greatly, in fact, that when the ratio goes beyond 80 or 90 percent the down payment requirement loses much of its effectiveness as a limitation upon the price which the purchaser can offer.

Generally, all lenders require that their borrowers pay back, by a specific date, the full amount of any principal borrowed and interest incurred during the period of the loan. This due date is referred to as the “maturity date.” The amount of principal and interest that is due on the maturity date will depend on how the loan was amortized. A loan can be fully or partially amortized or not amortized at all. A loan is an amortizing loan if the principal amount of the loan is reduced gradually as a result of periodic payments by the borrower to the lender.

Limitations imposed by mortgage terms

When the down payment is no longer a limitation on the amount of the loan, the amount which the borrower can reasonably be expected to repay determines its size. The prospective homeowner’s ability to repay mortgage debt ordinarily depends upon his future income; and while it is impossible to predict this with certainty, some assumptions as to its amount and stability must be made. Most families find it possible to provide for a minimum outlay on housing notwithstanding income instability, and it is this minimum that must be calculated as necessary to meet debt service and the other outlays occasioned by ownership.

For most people, a mortgage is their biggest and most important personal loan. Mortgages come in many different makes and styles. The most popular mortgage is the one that is amortized over 30 years, at which time it’s paid in full. However, 15-year mortgages offer some attractive advantages, including saving thousands of dollars in interest costs. The monthly payments on 15-year mortgages are higher, but counselors suggest getting the shortest term you can afford to save you money.

Mortgage loans come with either fixed or variable rates. Variable rates by definition vary or change over the life of the loan depending on how they are structured. Fixed rates are harder to qualify for but may be easier to maintain because the payments do not change.

For a $100,000 30-year mortgage at 8%, the borrower would pay $733.77 principal and interest per month. Loans that are repaid gradually over their life are called amortizing loans. The borrower’s money goes largely toward paying the interest in the early years of this loan, and most of the principal is not paid off until the later years.

The total interest paid on this loan would be $164,160. At the end of five years, the borrower would still owe $95,070 of the original $100,000 borrowed. That’s because in those early years, the bulk of each monthly payment goes to interest. It is not until sometime in the fifth year that the amount allocated toward principal repayment tops $100 per month. By around the 20th year of the loan payoff, more of the monthly payment goes toward repaying principal than paying interest. Once that happens, of course, the payoff goes much more rapidly, but by then the borrower has already paid more than $143,000 in interest.

The 15-year mortgage has an obvious advantage if the borrower can afford higher monthly payments. By paying the total loan sooner, the borrower needs less money for less time and pays less interest over the life of the loan. The disadvantage to the shorter 15-year loan is that the monthly payments are much higher than for a comparable 30-year loan and borrowers need to have a higher income to qualify for it.

For example, a $100,000 15-year mortgage at 8% interest would have a monthly payment of $955.65. Over the life of the loan, the borrower would pay only $72,017 in interest. By the end of the fifth year, the balance on this loan would be just under $79,000, but by the end of the 10th year, it would be down to $47,000. In those last five years, the payoff accelerates because the payments go almost entirely toward principal repayments, not on paying interest.

Another way to save thousands over the lifetime of a loan is to make additional principal payments. Let’s say you cannot afford the higher monthly payments of a 15-year mortgage. So you take a 30-year mortgage. At the same time, purchase an amortization chart or run one on some personal financial software such as Quicken. These charts show precisely how much money is going toward interest and principal for every payment. In this example, initial principal payments range around $70. So when you send in your monthly mortgage payment, add an extra $70 to it and note on the coupon or mortgage voucher that the additional money is to go toward the principal. You still have to pay the mortgage the next month, of course, but what you’ve done is effectively cut one payment off the life of the loan. Do that whenever you have additional money on hand and two things happen: the equity in your home builds faster, and the loan balance decreases. Some mortgagers require that these additional principal payments reflect the exact amount of the next month’s due; others allow borrowers to contribute as much to additional principal payments as they wish.
The equity that you have in your home is the value of the home less the outstanding mortgage balance. The equity begins as your down payment and grows depending on the interest rate and length of the loan. If the home appreciates, or increases in value, equity likewise increases. If you need additional funds for college tuition payments, a home equity line of credit loan is a popular choice. Home equity loans are a line of credit with an adjustable rate you may draw on over time, secured by the equity in a home. Home equity lines of credit and second mortgages are similar in that the interest on both loans is tax deductible. However, a home equity loan is in essence a second lien against your property and must be paid off in full if and when you sell your home. A home equity loan works best for people with good credit who do not need all the money at once. That way they won’t be paying interest on the money until it is actually withdrawn, and pay interest only on the outstanding balance.

In every transaction involving real estate it is usually appropriate to retain an experienced Herriman Utah real estate lawyer. The following matters should be referred to the lawyer:

A. Scope of Document Review. An experienced Herriman Utah real estate lawyer will review the purchase agreement before execution, if possible, to determine if any unusual provisions of state law may affect the agreement. If such review is not possible before execution, have it done as soon as possible thereafter.

B. Local Compliance. An experienced Herriman Utah real estate lawyer will determine if the buyer will be able to hold title to the property, will have to qualify to do business, or will face any tax problems under state law. Special problems may be encountered when the buyer is a trust (e.g., if the trustee is a foreign bank, it may have to qualify to do business in the state where the property is located). In any case, an ancillary trustee is required in some states. Note that even if the real estate lawyer believes that it is not necessary for the buyer to qualify to do business to take title in the state, the title insurance company may require it to do so before it will issue title insurance. If the real estate lawyer determines that qualification is not necessary, we should confirm that the title company agrees with the opinion.

C. Zoning Letters. An experienced Herriman Utah real estate lawyer will should obtain a letter from the appropriate local government authority stating that the property is in compliance with applicable zoning, environmental and other regulations. Written confirmation of such compliance may not always be available, but an effort should be made to obtain the best confirmation possible. Also, keep in mind that such written confirmation is probably not binding on the local agency.

D. Leases. Send to your Herriman Utah real estate lawyer will all documents received for review from seller, including lease forms, to determine whether there are any problems with the documents under the applicable state law and to determine whether the documents should address additional matters. Ordinarily, the real estate lawyer’s review of leases should be limited to matters that might receive unusual treatment under the applicable state law.

E. Taxes. An experienced Herriman Utah real estate lawyer will check state and local tax laws affecting the property. In particular, the real estate lawyer should confirm that the income from the property, when a tax-exempt entity will be the owner, will be exempt from state taxation.

F. Bulk Sales. An experienced Herriman Utah real estate lawyer will should determine whether there will be any bulk sales requirements or any sales taxes applicable to the transaction. Also, ask the real estate lawyer to determine whether documentary transfer taxes or conveyance taxes will be applicable to the transactions and, if so, the amounts.

G. Customary Procedures. An experienced Herriman Utah real estate lawyer will determine whether there are any customary procedures for sales of property in the particular state that are not considered in the purchase agreement.

H. Title Insurance. An experienced Herriman Utah real estate lawyer will review the status of title and provisions for title insurance.

Herriman Utah Real Estate Attorney Free Consultation

When you need help with a real estate case or lawsuit in Herriman Utah, please call Ascent Law LLC (801) 676-5506 for your Free Consultation. We can help you with boundary disputes, easements, title problems, title insurance, contractor litigation, real estate purchase contracts and much more. We want to help you.

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

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Is A House Considered Real Estate?

Is A House Considered Real Estate?

In legal terms, all property will be classified as either personal property or real property. Each type of property is treated differently under the law. There are many different types of laws that specifically pertain to personal property, and many other types of laws that pertain specifically to real property.

Personal property is movable property. It’s anything that can be subject to ownership, except land. Real property is immovable property – its land and anything attached to the land. Normally, a piece of property can be easily classified as either personal property or real property. The difference between the two is usually fairly straightforward. However, sometimes it’s a little harder to categorize property.

An estate comprises the houses, outbuildings, supporting farmland, and woods that surround the gardens and grounds of a very large property, when people talk about estate planning; they’re usually referring to asset distribution. In other words, they’re talking about how your wealth, assets, pensions, and more will be gifted to your heirs after you pass away. But an estate plan is a bit more than that. In addition to determining who you’d like to give your money and property to, you should also be thinking about your healthcare decisions in advance. For example, some people have strict religious beliefs about being resuscitated or might not want to take certain drugs for personal reasons. Your estate plan can and should deal with these issues so that your loved ones don’t have to. An estate plan is made up of a handful of very important documents, each with a different and unique purpose. As we mentioned above, some of these estate planning documents let you choose what sort of care you want to receive in the hospital, while others can set up trust funds for your children or decide who will run the family business.

In the simplest case, you prove ownership of a house with a registered deed to the property that has your name on it. However, this simple method isn’t always available. If property has been in your family for generations, documents may not be available. In an area devastated by a natural disaster, documents may have been destroyed. In these situations, you may have to take extra steps to prove ownership of a house. If you’re seeking disaster relief, you may need to prove occupancy in addition to (or instead of) proving ownership.

• Get a copy of the deed to the property: The easiest way to prove your ownership of a house is with a title deed or grant deed that has your name on it. Deeds typically are filed in the recorder’s office of the county where the property is located. Even if you lost your personal copy of your deed after the destruction of your home or during a natural disaster, there should still be a copy of this document at the recorder’s office. If the recorder’s office was destroyed, contact your state government for more information on the registration of property records.

• Produce copies of purchase documents: Even without a deed, if you have a copy of the contract you signed when you bought the house, you may be able to use it to prove ownership. However, this document only proves that you owned the house at some point in the house – it isn’t definitive proof that you still own the house. As long as no one else is challenging your ownership of the property, purchase documents should be enough to prove your ownership. You may have to combine them with other documents, such as receipts for property tax payments or a homeowner’s insurance policy.

• Use the certificate of title for a mobile home: In most places, mobile homes are considered personal property rather than real estate. If you have the certificate of title for your mobile home, this can prove ownership in the house itself. The certificate of title for a mobile home typically won’t prove any ownership rights in the land underneath the mobile home, just the structure itself.

• Gather property tax receipts: You don’t have to be the record owner of a piece of real estate to pay property taxes for it. However, if you’ve been paying property taxes for the same house for several years, that can be evidence that you own the property. Even if you don’t have personal records, there will be records of tax payments at the county tax assessor’s office. These records typically list the name of the person making the payment. Paying property taxes for a house can be used to establish ownership, even if you aren’t the record owner of the property. This is known as adverse possession. However, gaining clear title to property using this method is relatively rare.

• Get copies of mortgage payment records: Without a deed or other ownership documents, you may also be able to prove ownership of a house if you can show that you have been making mortgage payments on the property. As with payment of property taxes, it’s unlikely someone would be making mortgage payments on a house that wasn’t theirs. You have additional proof of ownership if the mortgage is in your name, since the lender would have done due diligence to determine you were the rightful owner of the house before issuing the mortgage. Even if you’ve lost your personal records of mortgage payments, your mortgage company will still have them.

• Provide proof of homeowner’s insurance in your name: Even if you no longer have a mortgage on the house, you likely still have a homeowner’s insurance policy to protect your investment and limit liability losses. The insurance company has records of your policy and all payments made. Insurance companies typically verify ownership of property before issuing a homeowner’s insurance policy. Additionally, it is unlikely you would pay homeowner’s insurance premiums if you didn’t actually own the house.

• Complete an affidavit of ownership: An affidavit is a legal document you can draft and sign in the presence of a notary. When you sign this document, you are swearing under penalty of perjury that you are the owner of the property. While an affidavit of ownership does have legal significance, this method should only be used as a last resort to prove ownership of a house. If you do swear out an affidavit, support that document with as much other information as you have, including any mortgage, tax, or insurance records.

• Gather identification documents: Many basic identification documents, such as state-issued driver’s licenses, include the address of your primary residence. The address of the house on official identification is strong evidence that you live there. While having the address on your driver’s license doesn’t necessarily prove that you own the house, it can help to prove that you live there. Particularly if you were the victim of a natural disaster, you may have to prove both ownership and occupancy to be eligible for some types of aid.

• Get copies of sales agreements or other legal documents: If you purchased appliances or other supplies used in the house, the sales agreement may include the address of the house. Any other legal document that includes your residence would also have the address of the house. Court documents require your address, in part to establish that the court has jurisdiction. Other legal forms or applications may also include your address. If you’ve lost your copies of these documents, you may be able to get new copies at the courthouse, or by contacting the store or other person involved in the transaction.

• Show utility bills in your name: Bills for water or electricity in your name are strong evidence that you live in the house. If you’ve lost copies of past utility bills, contact the utility company and ask for an account history or transaction record. Since virtually anyone can start utilities at a house, utility bills are never proof of ownership. However, they are solid evidence that you live in the house. If the utilities are not in your name, you may still be able to prove occupancy if you can demonstrate your relationship to the person who turned on the utilities. For example, if your mother turned on the utilities, that relationship would typically be sufficient.

• Find official mail sent to you at the house’s address: It’s generally accepted that you live at an address if you gave that address out to businesses or organizations to communicate with you. Any sort of bills or statements with your name and address are sufficient. Mail provides better evidence if it is generated in the course of business, such as a credit card statement or a delivery notice. Anything that says “or current resident” (or similar) under your name won’t work to establish occupancy.

• Submit a declarative statement: If all else fails, you can swear out an affidavit stating that you occupy the house in question. While you do sign the statement under penalty of perjury, this is considered the weakest form of proof and may not be accepted by some relief organizations or government agencies. Whenever possible, have other documents to support your declarative statement. Even if a document isn’t enough to prove occupancy by itself, it may gain strength when combined with other documents.

• Call the local police to have squatters removed as trespassers: If the squatters have only recently taken up residence in a house you own, you may be able to get them charged criminally without much effort on your part. If the squatters have been in the home for several weeks, police may not be legally able to do anything to remove them. If you don’t take steps to legally remove them, they may be able to challenge your ownership of the house. If you are able to get squatters removed as trespassers, you may be able to press criminal charges, or to sue them in civil court (particularly if they caused damage to your property while there).

• Serve an eviction notice if you can’t remove them as trespassers: While the specifics of eviction vary among states, the basic process is fairly similar. Get a sheriff’s deputy to serve the squatters with a written notice that they are being evicted. From the date notice is received, they have a limited period of time to leave the property, unless they choose to challenge the eviction. As strange as it may sound, if people live in a house for an extended period of time, they may acquire the rights of tenants – even if they entered illegally and have never paid you any rent. This gives them some rights to occupy the property until you can get a court order. You can find forms online to use to evict squatters from property you own. The easiest way to make sure the forms you get are valid in your area is to look for forms provided by the court where you will file your lawsuit for eviction.

• Go to court to get the squatters forcibly removed: If the squatters stay in the house despite your notice, a judge will have to find that you own the property and that the squatters are there illegally. With a court order, you can get a sheriff’s deputy to forcibly remove the squatters. In court, you typically need a title deed or similar proof of ownership of the house to prove that you have the right to remove the squatters.

• Visit all houses you own at least once a year: Once you’ve gone through the time-consuming and stressful process of evicting squatters, make sure it doesn’t happen again. If you own any houses that are unoccupied, check them regularly to make sure no one has moved in illegally. If you catch a squatter quickly, you may be able to call the police and have them removed as a trespasser without having to go through the eviction process again. You can also take additional steps to make the house less attractive to potential squatters. Install lights that are set on a timer, and place security cameras at the entrances. Keep the yard neat so the house doesn’t appear abandoned.

Real Estate Lawyer Free Consultation

When you need help with real property or real estate in Utah, please call Ascent Law LLC (801) 676-5506 for your Free Consultation. We can help you with Quiet Title Actions. Evictions for Landlords. Partition Actions. Zoning and Use Matter. Lawsuits and Litigation. Chains of Title Issues. And Much More. We want to help you with your real estate matter.

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

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Bankruptcy Lawyer Park City Utah

Bankruptcy Lawyer Park City Utah

If you are unable to pay off your student loan debts, speak to an experienced Park City Utah bankruptcy lawyer. While bankruptcy does not discharge a student loan debt, you may get some benefit by filing for bankruptcy.

Since the mid-1990s, there has been frequent and consistent criticism of the U.S. Department of Education’s oversight of student loan companies. This criticism has come from a variety of sources, including members of Congress, public interest groups, and grassroots organizations. Even the Office of the Inspector General for the U.S. Department of Education has issued scathing criticisms regarding the department’s oversight of its loan programs.

Since the 1970s, the burden of college tuition has shifted dramatically from the state to the student. In 1977, it is estimated that students and their families borrowed about $1.8 billion through U.S. federal loan programs in order to attend college. By 1989, this amount had increased to twelve billion dollars. By 1996, it had soared to thirty billion dollars. Today, more than seventy billion dollars is borrowed through federal loan programs, and more than fifteen billion dollars is borrowed annually from private lenders.

Congress’s removal of standard consumer protections for these loans, the growing tendency to attach fees to the debt, and the collection methods that student loan companies were allowed to use all set the stage for unprecedented profiteering by the lending industry. It is not surprising that many personal fortunes were made by well-connected student loan executives— particularly after the amendments to the Higher Education Act in 1998.

In practice, student loan guarantors do two things. First, they extract significant funding from the federal government in return for serving in an extremely vague and ill-defined oversight capacity to the lenders. They themselves enjoy very little oversight from the federal government.
Second, they take defaulted student loan debt, attach massive penalties and fees to the debt, then proceed to use the various collection tools provided by the federal government to extract this increased amount from the borrower.

Private Student Loan In Bankruptcy

A great number of borrowers were thrust into financial insolvency due to family medical situations, and many were forced into bankruptcy because of overwhelming medical bills. In these cases, student loans, being nondischargeable in bankruptcy and inescapable unless the borrower can prove total and permanent disability, become a crushing weight—particularly after the penalties and fees that result from defaulting. Another type of consumer who is saddled with unmanageable student loan debt is the borrower who has taken out a private loan. The numbers in this group are growing very quickly. These borrowers tend to realize when they’re fairly young that their financial situations have become desperate. Private student loans are nondischargeable in bankruptcy, just like federal loans, but they carry far higher interest rates. These borrowers thus find themselves with skyrocketing amounts of debt more quickly than those who have federal education debt alone, but neither group of distressed borrowers has any power to negotiate for better repayment terms or for reasonable compromises.

Cosigning Parents In Bankruptcy

There has been an alarming increase in the number of parents who are faced with financial ruin because they cosigned loans for their children. This is due primarily to the explosive growth of high-interest private loans in the past decade, but it is also fueled by a growing number of parents who are taking out federally guaranteed PLUS loans so their children can go to college. In both cases, bankruptcy is not an option for these loans, and parents often have to liquidate assets in order to satisfy this debt.

Senior Citizens Losing Social Security Benefits

One increasingly common tactic used by guarantors and collection companies to extract wealth from student loan debtors is Social Security garnishment. Typically, this is an administrative action; in other words, in the case of defaulted student loans, no court order is required to attach a senior citizen’s benefits. Federal disability income can also be garnished in this manner.

Private student loans have exploded to rival federally guaranteed loans in the industry. In a few short years, they have grown to encompass nearly a quarter of the entire industry, and the airwaves are saturated with ads for these dangerous debt instruments. Many students make the mistake of applying for private loans instead of federal loans because they are attracted to the ease and quickness of the application process. However, the ease of applying can come at a great, often ruinous cost. Interest rates can be astronomical, and, like federal loans, the bankruptcy protections for private loans are extremely limited. This makes the lenders far less willing to negotiate with students facing financial difficulty.
Students often fall into the trap of these private loans and are led to believe that they are standard loans. Many do not understand the terms of the loans when they sign, and they find out only after it is too late that they agreed to interest rates of 18 percent, 20 percent, or more. The interest on these loans alone is sometimes more than half a student’s income after graduation. Moreover, parents often cosign these loans, and this puts their assets and credit scores at great risk. If you are facing a similar situation in life an experienced Park City Utah bankruptcy lawyer can help you.

Use Federal Loans First

Federal loans are always, without question, the more beneficial types of loan. While private lenders advertise heavily on campus, on the radio, and on television, private loans are never better than federal loans. Federal loans always have lower interest rates (set by Congress). Many are subsidized, so that the interest is paid while the student is in school. Federally guaranteed loans also have more flexible repayment options and federally mandated deferment and forbearance programs, which private loans do not offer.2 Also, for federal loans, there are at least some circumstances in which loans can be forgiven, including the death of the student, total and permanent disability of the student borrower, school closure, and others. If a student’s financial aid package falls short of covering costs by using just federal loans, then that student should give serious consideration to attending a less expensive college.
Learn about the Impact of Defaulting on Loans

Prior to Obtaining Them

Most defaulted borrowers had no idea that student loans could not be refinanced after consolidation, were largely exempt from bankruptcy discharge, and had no statutes of limitations for their collections. The vast majority of defaulted student borrowers also were never told about the massive penalties and fees that would be attached to their loans if they defaulted; they had to find out the hard way, after it was too late. No mention was ever made to them that their professional licenses could be suspended and their income tax returns, wages, and Social Security income could be seized as a result of their defaulting on their student loans.
Until consumer protections are restored to education loans, and until Congress puts an end to the ruthless collection tactics employed by the student loan collection industry, students are well advised to educate themselves about these facts.

Graduation: To Consolidate or Not

Graduating from college or leaving school for other reasons represents a critical juncture with regard to student loans. It is here that the most students consider whether or not to consolidate their loans, which means bundling loans into a single loan with a new (or the same) lender. The interest rate for consolidation loans is the weighted average of the original loans rounded up to the nearest eighth of a percent. For federally guaranteed loans (such as Stafford, PLUS, and so forth), consolidating loans is allowed only once; therefore, after a student consolidates, he or she is stuck with that lender for the life of the loan. Of course, if a borrower takes out an additional loan, consolidation can occur again, but it is not advisable to take out a student loan for the sole purpose of consolidation, although perhaps leaving a small loan out of the consolidation would be a prudent action to take to preserve the option of refinancing later.

For federal loans, companies often offer some discounts for consolidation, such as interest rate reductions for on-time payments and automatic withdrawals, but only a minority of borrowers actually receive these benefits throughout the life of the loan. For one reason or another (for example, a missed payment or a late payment), these benefits are taken away from perhaps 90 percent of borrowers. In fact, most borrowers who lose prompt payment discounts do so on the very first payment.

Also, consolidation of loans often results in the loans being changed from subsidized to unsubsidized. This can have a significant effect on the borrower if a deferment is required in times of unemployment or other periods of financial distress, since the government pays the interest on the subsidized portion of the loan during deferment (but not forbearance). Borrowers should prefer deferments over forbearances and try to pay at least the interest during a forbearance to keep the loan balance from growing.

It cannot be emphasized enough that under current federal law, consolidation of student loans represents the last opportunity the student will have to shop his or her loans around to find the best terms. Until federal law opens up the marketplace to more competition and provides borrowers with the freedom to refinance the debt, borrowers must do as much research as possible on this prior to consolidation so they are able to make informed decisions based on the range of possible scenarios that might befall them. Web sites like FinAid.org provide current information about borrower discounts available for student consolidation loans. FinAid.org also provides a wide array of cost and repayment calculators that the borrower would do well to try before making any final decisions about loans.

Loan Forgiveness for Public Service

For people who have a large amount of debt and who plan on entering public service after graduation, a new program passed into law with the College Cost Reduction and Access Act of 2007 may be the only way to pay off student loan debts in a reasonable amount of time. It is the public service loan forgiveness program, and it forgives the remaining balance of Direct Loans after 120 payments are made. There is a requirement, however: borrow ers must be employed full-time in a public service job while repaying the debt. This includes working for federal, state, or local government, 501c(3) nonprofit organizations, law enforcement, and other positions as defined by the new legislation.

This program is very attractive for new graduates who have high debt loads and career aspirations in the public sector. However, the borrower must have a loan through the Direct Loan Program, which means that FFELP borrowers have to consolidate their loans into this program. The program is also attractive in that an income-based repayment plan or income-sensitive contingent repayment plan can be used throughout the term. It does have its risks also, though. For example, under current law, the amount that is forgiven at the end of the ten-year term is counted as taxable income. This could be a very large amount, depending upon the original debt load of the borrower and his or her income during the repayment period. Here is another risk: borrowers who decide after a few years of repayment that public service isn’t for them may be worse off than when they started, since any unpaid interest is capitalized.

For defaulted borrowers whose debt loads have already skyrocketed and whose earnings are low, this taxable event could prove to be devastating. Other problems exist with the service forgiveness program from the perspective of longtime defaulted borrowers and are described in the previous chapter. For defaulted borrowers in this circumstance, unfortunately, there simply are no workable options under the current law that would allow the debt to be satisfied in a reasonable amount of time.

If you are overburdened with student loan debt and you are unable pay it off along with other debts, consult an experienced Park City Utah bankruptcy lawyer.

Park City Utah Bankruptcy Lawyer Free Consultation

When you need debt relief to stop a garnishment, get a repossessed car back or help to have a fresh start, please call Ascent Law LLC (801) 676-5506 for your free consultation. We can help you file a chapter 7 bankruptcy. Chapter 13 bankruptcy. Chapter 12 Bankruptcy. Chapter 9 Bankruptcy. Chapter 11 Bankruptcy. Help with a Loan Modification. And Much More. 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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