Alabama Repossession Laws

Any purchase made in Alabama on credit or using collateral may be repossessed by the creditor. Repossession is most frequently seen with cars. Until the creditor receives the final loan payment, the lender holds crucial rights to the vehicle. Every state has specific laws regarding repossession and these laws are constantly changing. The laws in Alabama might differ from laws in some other states.


When Repossessions Can Happen

As soon as a borrower defaults on the loan, the creditor can repossess the property. The lender is not required to provide a grace period or extra time for payments. Repossession can begin as soon as one day after a payment was due. If the borrower knows he will be late on payment, he should contact the creditors immediately to inform them of the issue. To avoid repossession, creditors may work with borrowers to make a revised payment schedule or delay the payment, although they are not legally obligated to do so.

How Repossessions Happen

A creditor can repossess property at any time, as long as it is handled in a peaceful manner. The creditor does not have to officially sue the borrower or take her to court before it occurs, but the borrower has to be notified of the repossession. The creditor cannot lure the borrower into bringing the property to a desired location or use any force or threats of violence. The borrower does have the right to any personal property left within the vehicle. She should approach the creditor immediately to retrieve those items or write a letter listing the items and make arrangements to collect them.

After the Repossession

Once the property is gone, the borrower will receive a notice of his right to redeem the automobile. This simply means that the borrower has the right to get the car back, but only if he satisfies the conditions set forth. Usually the borrower has to pay the entire balance of the loan, not just the sum of late payments. The borrower will also have to pay any expenses associated with the repossession (such as storage and preparation for sale). If the borrower cannot pay off the loan, the creditor normally sells the car. If the car sells for less money than the balance of the loan, the borrower is still responsible for the remaining balance. The creditor will inform you of the deficiency and will sue you for the payment. If the creditor did not follow the law on repossession (breached the peace or failed to sell the car in a reasonable manner), the borrower may have some legal defense against paying the deficiency on the loan. In this case, the borrower should obtain sound legal advice.

The Process of Foreclosure

The process of a foreclosure may differ from state to state, but the basics remain constant. Foreclosure can happen to any home-owner and typically no one benefits from it. It damages the credit of the home-owner and usually results in loss for the lender. If you are facing foreclosure, or you represent a lender foreclosing on a borrower, these steps should accurately reflect the process.

Step One:

Neglect to pay the loan payment. Most banks will not start foreclosure after just one missed payment. There tends to be a grace period before the proceedings begin. After the second missed payment, the bank will contact the borrower. At this point, the lender will usually accept both missed payments to rectify the situation. If the borrower is unable to pay, the situation will escalate.

Step Two:

Continue into foreclosure. At the third missed payment, the mortgage holder will proceed with a judicial sale or a power of sale. In a judicial sale, the mortgage lender files suit with the court system, and the borrower receives a letter demanding payment. Usually the court gives the borrower 30 days to respond with payment. If thirty days lapses without payment, then the lender can sell the property in an auction. A power of sale is less common, but operates without the court system. The mortgage lender demands payment from the borrower; if the payment is not received in the established time period, a deed of trust transfers the property to a trustee. The trustee then sells the house at a public auction. The home owner will be notified of all proceedings.

Step Three:

Sell the home. At auction, the opening bid is usually set at the sum of the outstanding loan balance, interest accrued, and legal fees associated with the foreclosure. If the opening bid is not met, the property is purchased back by the lender and deemed an REO or Real Estate Owned.

Step Four:

Leave the property. Once the property is sold, the sheriff’s office will serve an eviction notice. The borrower must vacate the home immediately. If the property was sold for an amount less than what was owed on the mortgage, there can be a deficiency judgment. The borrower will be required to pay the difference on the mortgage.


Warnings

A foreclosure should not be seen as an easy solution to a financial hardship. The foreclosure can leave a family homeless and can damage the family’s hopes of buying real estate in the future. Many employers are now requiring a good credit rating for employment, and in some cases, foreclosure can be grounds for termination.

A foreclosure can cost the local government thousands of dollars in trash removal, unpaid utilities, police costs, and inspections.

It is likely that the value of properties near the foreclosed home will decrease.

Buying a Home with Bad Credit

Simply because you have bad credit doesn’t mean that the dream of home ownership is out of your reach. While credit scores and credit history do play a role in mortgage financing approval, it’s not the end all and be all of the approval process.

Different Borrowers Require Different Lenders

Borrowers with good credit and borrowers with bad credit should not be approaching the same mortgage lenders. It’s similar to a bargain shopper heading to the Gucci store. The two things do fit in the same category.

Borrowers with bad credit typically need to seek lenders that cater to low credit score and poor history borrowers. Generally, these lenders are called B-paper lenders or subprime lenders. The interest rates between traditional lenders and subprime lenders is subprime lenders typically have higher interest rates because they are dealing with higher risk borrowers. Fees can also differ between the two, with subprime lenders charging more to process a mortgage than a traditional lender.

Where to Find Bad Credit Lenders

Probably one of the best sources to turn to for subprime lending is a mortgage broker. Since a mortgage broker doesn’t work for any one lender, they have access to a variety of lending sources. One of the lending options is sure to fit the need of a bad credit borrower.

Another option is to work on repairing your credit before applying for a mortgage. Once you have your credit under control, then you can apply with a traditional lender and keep your fees and interest rate down.

Bad credit borrowers are not exempt from home ownership. You may have to take a different route than a good credit borrower, but in the end home ownership is within reach.

Federal Reserve Raises Interest Rate Charged to Banks, In First Move Since 2008

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How to Get a Mortgage after Bankruptcy

Bankruptcy may seem like an option to wipe your credit problem slate clean so you can start anew, but filing bankruptcy decreases your credit score and stays on your credit for up to ten years. This means every time a lender pulls your credit report to make a lending decision, they see you filed for bankruptcy, which can make it difficult to obtain mortgage financing. The good news is that there is still hope in obtaining a mortgage even after filing for bankruptcy.

3 Steps for Building Credit After Bankruptcy

After a bankruptcy, you have to take a proactive approach to rebuilding your credit and improving your credit score. This shows lenders that you’re back in control of your finances. Rebuilding your credit is a process and one a process that may take years to truly accomplish. Don’t get frustrated though. If you’re persistent, the persistency pays off and puts you back in a position where you can obtain mortgage approval.

1. Build new credit. It’s important to apply for new credit as soon as possible. You may have to start small – applying for gas or department store credit accounts – and then progress into larger credit purchases such as vehicles and eventually a mortgage. You can also apply for a secured credit card from your bank, which leverages the amount of money you have deposited with the institution to extend you a credit card.

2. Repair bad credit. If you have late payments or no pay accounts, work on repairing these items. Contact the creditors or collection agencies you have negative items with (that were not part of the bankruptcy) to make payment or payoff arrangements to clear these items up and remove them from your credit report.

3. Increase your credit score. Several factors go into calculating your credit score.
The number one factor in calculating your credit score is making your payments on time, so always make payments on or before the due dates. Other ways to increase a credit score is to keep good longstanding relationships with creditors, have a mixture credit account types and obtain new credit from time to time.

While a bankruptcy may seem equivalent to wearing a Scarlet Letter, there are proactive steps you can take to get your credit back on track. It illustrates to creditors such as mortgage lenders that you are all about regaining control of your finances and a worthy credit risk.

Top Ten Rules for Saving for Retirement

Saving for your retirement years is as important as planning your finances for the here and now. With more and more seniors finding themselves without enough money to live out their retirement years, take the time now to make sure you’re following the top ten rules for saving for your retirement.

Plan
The first rule of retirement savings is to create a written plan. Financial plans include your income and expenses now and how you should invest your money today in order to grow it enough to cover future living expenses.

Budget
Create a budget that plots your income and expenses and use the budget to keep track of your spending. This ensures you don’t overspend so you can reach your retirement goals.

Continue to Work Part-time
Working a second part-time job during the years leading up to your retirement gives you an additional source of savings income. You can take on a part-time job during retirement to earn extra money or to keep your mind busy.

Review Bills Carefully
Don’t give away your money for free. Review monthly bills for accuracy so that you only pay creditors what is due to them.

Discounts
Clip coupons and take advantage of discounts where and when you can. Deposit the money you save savings into your retirement account. If you do this each time you eat out or buy an item, it will quickly add up over the years.

Comparison Shop
Never pay more than you have to for an item, especially a big-ticket one. Shop and compare at least three places before making a major purchase.


Start Now
It’s never too late to start saving for retirement. So, even if you’re only a few years away from retiring, put away money, invest your money and start planning today for your tomorrow.

Be Conservative
Invest your retirement money more conservatively than you would other funds. It’s as important to grow your money as it is to preserve the principal balance and protect it against inflation.

Professional Advice
Most individuals are not equipped to make investing and estate planning decisions. Seek the advice of a Certified Financial Planner (CFP) to help you review your situation, create a plan and set you on the path to reaching your retirement goals.

Consider Time
The number of years you have left until retirement plays a starring role in your investment options. Invest in a way that gives you the highest possible return for the time you have left until retirement.

How College Students Can Maximize and Make the Best Use of Their Tax Refund

College students are notoriously known for being bad with their money, but this doesn’t have to be the case. The Internal Revenue Service (IRS) provides students paying for higher education tuition to take some tax deductions that can maximize the amount received as a tax refund. The other side of the coin is that once you receive the tax refund, you have to figure out how to make the best use of the money.

College Tuition Tax Credits

If you’re paying for your own college tuition, you may have the option of taking advantage of one of two tax credits available - Hope/American Opportunity and Lifetime Learning. If you meet certain requirements, these programs can help you reduce how much you pay Uncle Sam and may even require Uncle Sam to pay you back.
Let’s cover what a tax credit is so you can fully understand how it can help you maximize your tax refund. When you earn income, you have to pay taxes on the money you earn. An education tax credit, however, allows you to deduct the amount you paid in college tuition costs, thus reducing the amount of income on which you have to pay taxes.

Hope/American Tax Credit

Part of the economic stimulus American Recovery and Reinvestment Act of 2009 was an expansion of the Hope Tax Credit, which was renamed the American Tax Credit. This tax credit is applicable to the 2009 and 2010 tax years. The old tax credit allowed you to deduct tuition costs for up to two years of your college education. The expanded version of the tax credit allows a deduction of four years of tuition costs and an expansion of income eligibility requirements.

Criteria for Claiming the Credit:
• You must be enrolled at least as a half-time student in an undergraduate degree program or legitimate educational program
• $2,500 is the maximum annual credit per student permitted
• For low-income students who have little or no tax liability, the credit may permit for up to $1,000 to be paid back to you
• The amount of the credit decreases if adjusted gross annual income for an individual is $80,000 and $90,000 or $160,000 or more for a joint return
• In order for a student to claim the credit, they must not be listed as a dependent on their parent’s (or parents’) tax form

Lifetime Learning Tax Credit

The Lifetime Learning Tax Credit allows you to deduct all of the years of your college tuition costs. This credit also allows for deductions for those that take a course or courses in order to improve their hob skills.

Criteria for Claiming the Credit:
• The credit is allowed for 20% of the tuition and fees paid for a college tuition, course or course
• The maximum amount of a tax credit is $2,000 per year, which is 20% of $10,000 in tuition and fees
• The amount of the credit decreases if adjusted gross annual income for an individual is $50,000 and $60,000 or $100,000 or more for a joint return
IRS Publication 970, Tax Benefits for Education, provides more information on education tax credits.


Making the Most of Your Refund

Essentially, you have three options in using your tax refund – spend it, save it or donate it. While it may be more fun to take all of your college pals out for a night at the bar, it’s not really the wisest way to spend your tax refund check. You worked hard for it though, so you should get to enjoy spending some of it on something fun.
Sit down with a paper and pencil and make a list of the ways you want to spend the money. Now list outstanding debt or bills you may have (such as credit card balances). Pull out your bank statements and look at the balances of your checking and savings accounts.

Take the amount of your refund and divide it up into parts, deciding how much you need to pay off or reduce outstanding debt and how much you need to save (make sure you have an emergency fund cushion). After you pay off or pay down at least one bill and sock away some money in savings, see how much you have left to have a little fun. Now look at your list of fun items and choose one based on the amount of money you have left to spend.

What You Know to Know about Student Health Insurance

Health insurance costs continue to rise and whether you’re a college student or a senior citizen, having health insurance coverage has become a necessity. Most college students have never had to deal with health insurance coverage before because they’ve been covered under their parents’ policy. If you’re a novice to student health insurance coverage, here’s what you need to know to make the right choice in health insurance policies.

Benefits

The benefits of a health insurance policy vary from insurance provider to insurance provider and even from policy to policy under the same provider. It’s important to break down each coverage option of the policy you are considering because some policies contain items you do not need, which means you’re paying for coverage that is going to go to waste. For example, if you’re a male and the policy you’re paying for contains maternity coverage, then you’re paying for something that you’re never going to use. On the other hand, some policies do not contain benefits that you do need, so it’s imperative that you understand what is and what isn’t covered by the policy you’re considering.

Some of the benefits you need to consider when comparing policies:
• The maximum amount of coverage the policy provides
• Deductible amount
• What is not covered under the policy (i.e., intramural sports injuries)
• Restrictions on choice of doctors
• Requirements (i.e., referral) for specialist care
• Travel coverage
• Ability to see a doctor without insurance company approval
• Undergraduate and graduate coverage restrictions
• Wellness visits to the doctor are covered or it’s only emergency coverage

Rates

The benefits contained in a health insurance policy directly relates to the cost of the policy. The more benefits a policy contains typically the higher the cost of the policy. When comparing policies make sure you understand the costs involved in establishing and maintaining the policy. It’s about more than the monthly premium you pay. You also need to understand the policy deductibles and co-pays (co-payments) because this determines the total amount of money you’re out-of-pocket when visiting the doctor or hospital.

The Need for Health Insurance

Most college campuses provide a health clinic for students to use at a reduced rate, but the quality of care from these clinics is not typically up to par with private doctors. These clinics are also not equipped to deal with every illness and disease. Since college campuses are a hotbed of germs and diseases, it’s wise to have a health insurance plan that is separate from on-campus health services, so you can practice preventative care, as well as deal with any illness or disease you acquire.

Shopping for student health insurance coverage is a major purchase that requires you to understand how the benefits of having it exceed the costs of having it. Health insurance is also an item that requires you to comparison shop to ensure you’re establishing the policy that is the most beneficial to you financially and to your health.

Get Your Finances in Order: 5 Personal Finance Reads that Should Be On Your List

If you’re not spending your Valentine’s Day weekend with someone special, maybe you can snuggle up with your finances and finally get them in working order. Even if you're spending Valentine's weekend doing something romantic, get these books to read on a rainy day or another time.

Career Building: Your Total Handbook for Finding a Job by editors of Careerbuilder.com

With an ever rising unemployment rate, this book unveils all of the secrets of searching for and landing a job. From revealing ways to spring-clean your resume and ace the interview to smoothing over workplace (and resume) blemishes and writing compelling cover and thank-you letters, if you’re searching for a job, then this is the guide you should be using.

10,001 Ways to Live Large on a Small Budget from Wisebread.com
This book is a collection of the wisdom finance experts and personal finance bloggers share on Wisebread.com. the book reveals how to live on a budget without feeling like you’re frugal or downright cheap.

I Will Teach You to Be Rich by Ramit Sethi

A young, hip and Stanford educated approach to managing money. Ramit speaks directly to college students to help them learn how to manage money and their personal finances in a more adult manner. The book is a spinoff from his personal finance blog, but readers of all ages can heed his advice.

Get a Financial Life (Personal Finance in Your Twenties and Thirties) by Beth Kobliner

For generations at the next level in life – those in their 20s and 30s – financial writer Beth Kobliner shares basic financial principles about saving and investing, paying taxes, choosing insurance, buying a home and finally getting out of debt. She uses real-life examples to illustrate that you can take these steps too.

Investing 101 by Kathy Kristof

Personal finance columnist for The Press Democrat shares investing tips based on personal and professional interviews with hundreds of investing gurus. The book covers every investing topic under the sun, from the basics of timing your buys to specific types of investment accounts such as IRAs and 529 college savings plans.

American Wind Energy Association Puts the Spotlight on Green Jobs

Is it possible that wind turbines can not only save the environment, but save the economy at the same time? The American Wind Energy Association seems to think so and it’s telling the world what it thinks with a new campaign that includes TV and online video ads. The purpose of the campaign is to promote a national renewable energy policy with a focus on how we can rebuild the economy, “One bolt at a time, one worker at a time, one factory at a time—all building wind turbines and creating thousands of new jobs.”

The American Wind Energy Association believes that a national renewable energy policy could be the foundation that creates hundreds of thousands of jobs in the U.S. and generates billions of dollars in revenue – ultimately stimulating the economy and putting a halt to increasing unemployment rate.

The Campaign

• A 30-second TV commercial, featuring Cardinal Fastener workers at a Bedford Heights, Ohio plant that makes bolts for wind turbines and other industrial products
• Two ads playing on YouTube featuring interviews with Cardinal Fastener workers, some of whom were laid-off autoworkers, and an interview with the president of Cardinal Fastener, John Grabner, discussing the importance of adopting a strong renewable energy policy

As smart online marketers, the TV commercial and all of the online videos send traffic to the website www.powerofwind.com, which allows visitors to send a message to Congress to let them know they support the Renewable Energy Standard, which a proposed bill calling for 25% of electricity to come from renewable resources by 2025.