Tax Savings with real estate

Under our existing tax code, we are able to deduct the interest and property tax that we pay in any given year from our gross income. This is basically the federal government subsidizing the purchase of our homes, according to Jeff Lowe, Real Estate Professional. Mr. Jeff Lowe, explains it like this. If your initial mortgage is $150,000.00 and your loan is at eight percent then in your first year, you would be paying $9,969.27 in interest alone. Under the tax code, you can reduce your taxable income by $9,969.27. Your property taxes are all deductible thereby your taxable income even more. This is one of the attractive incentives in home ownership and one of the factors that Jeff Lowe, explains to his clients when they are considering buying a home.

Justice Kagan

Supreme Court Justice Kagan delivered her first opinion ruling for a credit card company in a bankruptcy dispute. The court ruled 8-1, against a debtor who wanted to shield some income from his creditor by claiming a $471 monthly allowance for a car payment. The only problem was that he own his car outright. So the court reasonably ruled that he may not deduct loan or lease expenses when he does not have any.

Wamu Bankruptcy Plan Rejected

A Delaware bankruptcy judge has rejected Washington Mutual’s reorganization plan because it gave too much protection to the former executive of the bank. The judge further stated that the way the reorganization plan calls for doling out up to $10 billion in WaMu assets is reasonable. It calls for dividing disputed assets, paying off WaMu’s creditors and ending lawsuits that WaMu, JPMorgan Chase and the Federal Deposit Insurance Corp. filed against one another after WaMu’s collapse.

She also noted that WaMu was attempting to shield the executives from any responsibility for “willful misconduct and gross negligence,” which she said was too extensive.

Hidden tax breaks

Last December, as part of the deal broker between President Obama and the Republicans to extend the Bush tax cuts is a Social Security tax break. Employees will pay 4.2% of the first $106,800 of their wages into Social Security instead of 6.2%.

What is means is that less money will be withheld from everyone’s paychecks.

Discharge of debt

One of the reasons people file bankruptcy is to get a “discharge.” A discharge is a court order which states that you do not have to pay most of your debts. Some debts cannot be discharged. For example, you cannot discharge debts for:

* most taxes;
* child support;
* alimony;
* most student loans;
* court fines and criminal restitution; and
* personal injury caused by driving drunk or under the influence of drugs.

The discharge only applies to debts that arose before the date you filed. Also, if the judge finds that you received money or property by fraud, that debt may not be discharged.

You can only receive a chapter 7 discharge once every eight years. Other rules may apply if you previously received a discharge in a chapter 13 case. No one can make you pay a debt that has been discharged, but you can voluntarily pay any debt you wish to pay. You do not have to sign a reaffirmation agreement or any other kind of document to do this so be careful.

Poorer Cities Pay Higher Property Taxes

The Los Angeles Times, reported that residents of poorer cities are paying higher property taxes than those in more affluent cities according to data provided by the Los Angeles County Auditor-Controller’s Office.

Neighboring working-class cities, including Compton, San Fernando, El Monte, Huntington Park, Maywood, Montebello and Inglewood, also have high property tax rates. Indeed, of the 10 cities with the highest rates, six had median household incomes below $50,000.

Cities with the lowest rates: The bottom 10 included Manhattan Beach, Palos Verdes Estates, Rancho Palos Verdes, Rolling Hills, Rolling Hills Estates, Cerritos and La Habra Heights.

Foreclosure Increasing Again

The nation’s foreclosure crisis is worsening as homeowners battling high unemployment, slow job growth and an uneven rebound in home prices continue to fall behind on their mortgage payments.

In all, 154 out of 206 metropolitan areas with at least 200,000 residents posted an annual increase in foreclosure activity between January and June.

Notices for defaults, scheduled home auctions and home repossessions are all warnings that can lead up to a home eventually being lost to foreclosure.

The latest figures show the threat of foreclosures is spreading well beyond the top tier of metropolitan areas located in California, Florida, Nevada and Arizona, which have borne the brunt of the fallout from the housing crisis.

Those states saw housing values surge during the housing boom years. When the boom ended, values collapsed and foreclosures soared.

Bankruptcy Terminology

In Bankruptcy, a “case” refers to the bankruptcy action commenced by filing a bankruptcy petition, and “proceeding” refers to a specific matter, such as an adversary proceeding, that arises within the bankruptcy case.

The “debtor” is the party that either filed a voluntary bankruptcy petition or that had an involuntary petition filed against it.

The trustee, if any, must be distinguished from the US Trustee, who is a presence in every bankruptcy case. Generally, several United State Trustees work in each district office, and each bankruptcy case is assigned to an individual trustee. The United States Trustee has specific duties in bankruptcy cases under his or her watch – essentially these duties amount to an oversight function.

Foreclosure can impact your credit

While homeowners who default on a mortgage due to economic hardship, such as a job loss or divorce, normally must wait two to five years before buying a home again, walkaways may face double that time.

Walkaway, meaning those who voluntarily walk away from their home loan. For example, say you owe $600,000 when you house is only worth $300k, and you walk away from the debt and let the bank foreclose on you. It can take you up to seven to eight years to be in a position to buy a home again.

Credit scores are just one component of a complete credit decision. Future underwriters will scrutinize your records very closely and if they see no precipitating factors leading to the default, for example, no job loss, no health issues, then the repaired credit score won’t overshadow the black mark of a walkaway.

That is not to say you can’t get a loan. YOu might be able to put might have to pay a premium for it as well. Or be charger a higher interest rate to qualify.

Rangers Seek Bankruptcy Help

The major league franchise Texas Rangers seek bankruptcy protection to shield itself from about 30 creditors. Among the group of investors coming to the rescue is a group lead by the great Nolan Ryan.

His group is rumor to have offer $575 million to purchase the team. The sale would have to be approved by the court and Major League but could help lift the team out of bankruptcy and debt.