Welcome to the NEWSLETTER of Fisher’s Law Office, providing you with legal information you can use in your everyday life. In this issue of the Fishers Law office newsletter we discuss ways of surviving our difficult economic times.   If you have any questions about any of the articles in this newsletter please don’t hesitate to contact us.

I. Foreclosure do’s and don’ts:

The U.S. and international economies are in turmoil. Foreclosures are at an all time high and house prices are
falling for the first time since the great depression.

Foreclosure is a process by which a creditor forces the sale of a home to enforce a mortgage. (The word mortgage is an archaic French word that means “death note”.)

 Here are some things you need to be aware of if you fall behind on your payments:

1. Always contact the lender and explain your situation. This may delay the foreclosure process.
   
   
2. If you cannot pay your mortgage and the creditor sues to force a sale of your home, you need to make a fundamental decision as to whether or not you can to catch up the mortgage.
   
   
3. If you need time to find a new home, don’t simply let the foreclosure proceed without at least filing an answer to the lawsuit!  This might buy you some time until the house is sold.
   
   
4. You may have legal defenses. There are many problems with mortgages that were issued in 90’s and early 2000’s. For example: In many cases, lenders lose the original loan documents or they don’t have complete records of payments and charges to your account.
   
   
5. Be aware that many mortgages were sold without proper paper work to document the assignment of the mortgage. A good lawyer can raise these defenses in a court of the law and buy you more time to either catch up on your mortgage or save up enough money to move somewhere else. 

Lastly, consider having your attorney try to negotiate a settlement by which the mortgage holder waives any “deficiency” judgement against you. (Deficiency is the difference between the amount you owe and the value of the house.)

II. What assets are exempt from garnishment for seizure by creditors?

Fishers Law Office has noticed an alarming trend in which creditors have attempted to seize assets or wages that they are not entitled to seize. If someone has a judgment against you he can attempt to seize your wages and assets. There are exemptions from such seizures under Florida law.

Here is the process for requesting an exemption from garnishment of wages:

1. If you are the head of a household (meaning you provide more then one-half of the support for someone who lives with you who is a family member) then you are exempt from having your wages garnished.
   
   
2. If a creditor attempts to garnish your wages and you are “head of household” you should file an affidavit with the Clerk of the Court alleging your status and requesting a halt to the garnishment.
   
   
3. If there is nothing filed by the creditor within two-business day after service of the affidavit then the garnishment must immediately cease (see Florida statute 222.12).

Other assets that are that are exempt from seizure by creditors include:

1. Life insurance policies (Florida statute 222.13)
   
   
2. Cash surrender value of life insurance policies (Florida statute 222.14)
   
   
3. Unemployment compensation payment due to a deceased employee, which is paid to a spouse (see Florida statute 222.15)
   
   
4. Benefits under any contract of life, health or accident insurance are not subject to garnishment. (see Florida statute 222.18)
   
   
5. Most pensions are exempt from seizure by creditors. (See Florida statute 222.21)
   
   
6. Medical savings accounts, education savings accounts, hurricane savings accounts can not be seized. (See Florida statute 222.22)

Other properties that are exempt from seizure include:

Up to $1,000 worth of value in a motor vehicle, professionally prescribed health equipment, a debtor’s interest in certain IRS refunds and homesteads.

III. How can you sell your home if you have a judgment against you?

It is perfectly legal to sell a homestead in Florida without paying general creditors who have judgements against the homestead owner. To do so you simply follow the procedure for selling a house set forth in Florida statute section 222.01.

Practice note: If you have questions about any of these exemptions, please see your friends at Fisher’s Law Office, PA.

IV. Refinancing do’s and don’ts:

1. Do refinance if a “reset” of the interest rate on your home mortgage is scheduled to take place in the next year. The earlier you take action, the greater the chance of a successful refinance. (Watch out for “prepayment penalties” on your old loan however.)
   
   
2. Don’t refinance to take money in a “cash out” unless you have an urgent need for money.
   
   
3. Do refinance if you have a “balloon note” that requires you to pay off the entire mortgage at one time and you don’t have the money to pay off the loan in one payment.
   
   
4. Do shop around and ask banks as well as mortgage brokers for the best rates.
   
   
5. Do get a copy of your credit report and see if there are any errors before you apply for refinancing.
   
   
6. Do challenge improper items on your credit report before your apply for refinancing.
   
   
7. Don’t refinance into an adjustable rate loan if you cannot afford the new payments.
   
   
8. Do consider making extra payments on your mortgage if your mortgage and note allow you to do so.
   
   
9. Do know the name and address of the “loan servicer” on your mortgage. This is the company to whom you should make payments. It can change often, so pay attention to any notices you receive regarding your mortgage.
   
   
10. Do keep a file of all activity on your loan, including applications for credit, paperwork from the lender, a copy of all loan documents and a history of payments you have made. Don’t trust banks to keep good records!

V. More tricks to buying a new home:

Now that the great credit boom of the early 2000’s has passed, it has become extremely difficult to borrow money to buy a house or to refinance a mortgage.

Here are some “tricks” that experts say is often helpful is boosting your chance of being able to borrow money for a mortgage:

1. Try to make at least a 5% down payment. Lenders are looking to loan money to homeowners who have their own money at stake in a home purchase or refinance.
   
   
2. Try to put enough money down to avoid a “jumbo” mortgage. Jumbo mortgages are mortgages in excess of $417,000. It is very difficult for lenders to re-sell jumbo mortgages and consequently the interest rate on jumbos is higher than conventional home loans, so try to borrow less to make your loan more marketable.
   
   
3. Have documentation for income you list on your credit application. For example, gather your W-2 wage statements, pay stubs and tax returns to show the bank.
   
   
4. You should have enough reserve money to pay at least 6 monthly payments in case you get sick. Lenders are looking for customers who have a “cushion” and are able to make payments if they get sick or are unable to work for a while.

VI. Passport Update!

1. Beginning soon all U.S. citizens must have a United States passport to travel abroad. There are many good reasons to have a passport:
                  
   If you have a passport, you have positive proof of your identity. This will not only allow you to travel abroad but also prove who you are to banks, government officials and notaries.
   
   
2. Should the building where your birth records are kept be destroyed, you can still prove your identity.
   
   
3. Identity thieves have been known to apply for a passport in other people’s names. If you have a passport in your own name it is almost impossible for someone else to steal your identity by claiming to be you and applying for a false passport.

Be warned of the following practice item:

If you owe back child support the federal government will deny you a passport until you caught up with your child support obligations. There are many states that are reporting child support arrearages to the federal government. The government is in turn denying passports to persons who owe back child support.

And lastly, be aware that there is a long passport application backlog and it can take several months to get a new passport.

VII. Are you approaching retirement? Here are some secrets to help you manage your money:

1. Many experts advise people getting ready to retire to make sure they have paid off all credit card debt.
   
   
2. If you have a credit card, try to pay the balance monthly. Do not charge necessities such as groceries if you are not going to pay off the balance at the end of the month.
   
   
3. Spend less than you make. This is the way to save and build your wealth instead of getting further and further into debt.
   
   
4. Pay for yourself first! Make a contribution to your savings or retirement plan before you spend money on consumption items.
   
   
5. Take a good look at your spending habits. Write down all your purchases for a month. The results might shock you. Are you spending money on frivolous items?
   
   
6. Determine the difference between needs and wants. You might be able to eliminate things you want in order to begin saving. For example, do you really need full service cable, lawn service, and a new automobile? Or are these simply things you’ve convinced yourself you need?

VIII. Florida has a new “relocation” law:

The new Florida relocation statute is contained in Florida statute section 61.13001. In general, this new statute states that a parent who is relocating to another state must give written notice to the other parent of the child of intention to relocate.

Practice note: if you receive such a notice of intent to relocate you must respond to it immediately! This is because the law provides that if no objection is filed within 30 days after service of the notice of intent to relocate, the court will allow relocation! There are several other aspects of the law that you want to discuss with your legal counsel whenever a spouse tells you or you hear that relocation is imminent.

IX.  Case of the Month:

Fisher’s Law Office had a client who had excellent credit. He had never defaulted on any on his loans and had a good relationship with all of his creditors. Our client was sued by a company that purchased a credit card debt from a large bank.

Fisher’s Law Office investigated and found that the credit card was applied for and obtained by an identity thief who proceeded to run up thousands of dollars of credit card charges in our good client’s name.

Attorney Ralph B. Fisher, Esq., filed numerous legal documents to defend the client who was improperly sued, including an answer denying the claim, request for admissions, request for production and a motion for attorney’s fees.

Federal law is very clear in this area. The amended “Fair Credit-Reporting Act” makes it illegal for a credit card company to sell or transfer a debt caused by identity theft (see 15 u.s.c section 1681m). Since the debt was illegally sold by the credit card company to a debt collector, a violation of the law occurred. The company that sued our client dismissed the case against our client and apologized for suing him.