Ways to Improve Your Credit Score

A new client came into Matthew C. Mullhofer Attorney’s office with questions in regards to improving her credit score. She divorced in 2004 and had to file for bankruptcy, and the case became final in 2005. Her credit score was in the mid 600’s and she wanted advice as to how to improve her score. She explained that currently she had no debt and she always pays her bills on time.

Matthew C. Mullhofer Attorney advised this client to request a free copy of all three credit reports from annualcreditreport.com and review her credit score to make sure all entries were correct, including the bankruptcy.

Mr. Mullhofer let her know that according to the Fair Credit Reporting Act you can dispute inaccurate and incorrect information. If the creditors do not respond to the disputed item within 30 days, it will be removed from the credit report. This also includes public records that would have the bankruptcy listed.

Matthew C. Mullhofer Attorney let her know that she was on the right track, but she needed to have active revolving and installment credit being reported on her credit report in order to help her credit score. He advised her not to obtain a huge amount of debt, and that she didntt need to keep balances on her credit cards in order to improve her credit score. To pay her payments in full every month, and this should help her build her credit.

One last thing Mr. Mullhofer advised his client was to make sure to keep balances below 30 percent of the credit limit on any credit card.

Please feel free to contact Matthew Mullhofer Attorney at (877) 246-2770, to discuss any financial questions you may have.

Settling An Account For Less

A client of Matthew C. Mullhofer Attorney came into his office the other day with a question in regards to settling a bill that he stopped making payments months ago. He wanted to settle the account for less than what he owed and wanted to know the best way to handle this, and if there would be any way to prevent this from affecting his credit report negatively.

Matthew C. Mullhofer advised him that whenever a person wants to try and settle an account for less than the amount owed, it is important to have the cash ready when you make the offer. Do not call the creditor and ask them what they will take. If a person is not ready to act, don’t waste time.

When making the offer, it should be done at the end of the month since this is the time most creditors and collection agencies are trying to close their books for the month. Mr. Mullhofer advised to have the cash ready and tell the creditor you can have the money them within 48 hours if they agree.

The most important part that Matthew C. Mullhofer Attorney advised his client, is to get a letter from the creditor where they state the amount they have agreed to accept as payment in full with no additional charges once they have received your payment. This letter should be signed, dated, and in your possession before you pay anything. If they refuse to give you this letter, don’t pay. Without this letter the creditors can later down the road state they never agreed to settle for a lesser amount.

When making payment, make sure to send it by certified mail or a means by which you can track the payment and make sure it arrived to its appropriate location. Always make copies of your payment to them and keep it for your records for at least 5 years.

Matthew C. Mullhofer Attorney advised his client to request they remove the entry from his credit report or at least report it as “paid” as part of the negotiation. Request that the entry state “paid” and not “settled for less”.

Please feel free to contact Matthew Mullhofer Attorney at (877) 246-2770, to discuss debt settlement or bankruptcy.

Planning Without Estate Tax Concerns

A client of Matthew C. Mullhofer Attorney called him regarding the Estate Tax laws for the 2011-2012 years. Mr. Mullhofer explained that the 2010 Tax Relief Act contained new tax arrangements for 2011 and 2012. These arrangements include a higher amount that can be transferred and a tax rate that is lowered which could take off the burden from many estates.

Matthew C. Mullhofer Attorney brought up to his client that in 2013 the estate tax is scheduled to become more aggressive which means that it could affect many families who are not considered wealthy.

Mr. Mullhofer went on to explain that for estates left behind in 2011 and 2012, assets exceeding a $5 million will be taxed at 35%(this has been the lowest tax rate in 70 years!). Married couples may be able to pool their exemptions to shield up to $10 million from federal estate taxes with the proper planning. This means that 99% of the country may not be obligated to pay estate tax. Planning is a key component when it comes to protecting assets and shifting income to heirs. In today’s depreciated real estate market, $5 or $10 million is a lot of money.

In order to transfer $5 or $10 million to their children, trustees have to establish the typical family trust that provides for the first 3.5 or 5 million to be transferred into their children’s trust, explained Mr. Mullhofer. He recommended that the trust give the surviving spouse the ability to dictate how the distributions to their children will be if there is a change in circumstances after the death of the first spouse. Unfortunately, this type of planning is not provided for in some family trust documents that Mr. Mullhofer has reviewed.

Mr. Mullhofer’s client also wanted to know how to preserve and protect assets. Matthew C. Mullhofer Attorney explained that using a limited partnership or limited liability company would be one way to do that, especially wherever real estate is a major asset. There are also different types of trusts to consider and choose from.

Call Matthew C. Mullhofer Attorney today to discuss your Estate Tax concerns at (714) 827-9955.

Preserving the Family Business

Matthew C. Mullhofer Attorney, was contacted by a new client that wanted some information on how to safely plan their family business to ensure its survival from one generation to the next. Mr. Mullhofer, explained that statistically, family businesses have only a 20% chance of being successfully transferred from one generation to the next. Matthew C. Mullhofer Attorney, explained that the failure to properly plan is what causes businesses to fail when getting transferred from one generation to the next.

Mr. Mullhofer let the clients know that until the end of 2012 a couple will be able to transfer up to $10 million estate tax free to their family, but in the beginning of 2013 the amount may be reduced to $7 million. This means that approximately 98-99% of family businesses will not have to worry about death taxes, and a family business will not fail because of death taxes, so it is safe to say that properly planning is what a business needs in order for it to prosper from one generation to the next.

Matthew C. Mullhofer Attorne, gave them a list of a few basic questions that a business owner today must think about in order to properly deal with the major family asset. Some of the basic questions that Mr. Mullhofer suggested are:

¨ Who will be taking over the family business if owner wants it to continue to the next generation? Is it going to be a family member or some key employee?

¨ Do the owner’s children want to continue the family business or not? If children are involved are they all involved or just one or two? If so, how will the value of the business be shared after your death, if all of your children are to be treated equally?

¨ If the business owner is married, how will the surviving spouse be able to have sufficient cash flow for the balance of his or her life? Where will that cash flow come from? If your business does not pay dividends now, will it after your death to your spouse?

¨ Do you have assets that can be segregated from the business that can produce income without having to run the business if it is sold? For example, do you or the business own the real property where the business is located? If so, you should think about a long term lease for the survivor, if the new owner does not want to operate the business at the same location. This way the survivors lease interest has to be dealt with if the business has to be sold.

¨ Is there a key contract or license agreement that can be placed into a separate limited partnership or limited liability company for asset protection purposes from outside creditors?

¨ Do you want to provide for your children only or for your grandchildren also? If so, do you want your children to have an incoming with invasion of principal during their lifetime of the family assets in order to assure that there will be no estate tax owed on your childrens death? This is call dynasty or generation skipping planning.

¨ If there is going to be a trustee for the surviving spouse from your portion of the family wealth that you own, who will be the trustee? Will it be the surviving spouse, your child or some third part? Can any of them run the family business or manage the family wealth if the business is sold?

These questions are just a few out of many that Matthew C. Mullhofer Attorney, asks when developing a plan to preserve the family business. Devoting time to plan is a major component in preserving all the hard work that has gone into the business.

Make an appointment with Matthew C. Mullhofer at (714) 827-9955 today so he can help you preserve your family business.

The New California Short Sale Law

One of Matthew C. Mullhofer Attorney clients came into his office with a Real Estate question. She wanted to know the details surrounding the New California Short Sale Law. Mr. Mullhofer knew that the law was made to protect many homeowners, but there are many loopholes that a homeowner needs to be aware of.

The California Legislature recently passed Senate Bill 931 which added Section 580(e) to the California Code of Civil Procedure effective January 1, 2011. This new section is great news for most short sale sellers. It means that when a seller of a one-to-four unit residential property (occupied residential property that is the borrower's primary residence) with only a first deed of trust sells the property as a short sale the lender cannot come after them for the unpaid balance. This law states that by approving the short sale, the lender is okay with the seller not paying the unpaid balance.

There are some exceptions to this law, and they are: it does not apply to loans secured by other types of properties nor does it apply to second or other junior liens against the property. The new law also does not apply if the borrower is a corporation or a political subdivision of the state.

Two possible big exceptions are: if the borrower commits fraud and the second exception is if the borrower commits waste. In both of these situations the law will not limit the lenders ability to seek damages.

A type of fraud that may have occurred which would remove the protection that this law offers might be: giving false information at the time the loan was being obtained in order to be approved for the short sale for example, misrepresenting hardship or concealment of additional offers. This would be sufficient enough to open the door to liability for the unpaid balance.

Waste is a legal approach in which a party acts in a manner which takes away from the value of the property. For example, removing appliances or stripping electrical fixtures from the property. This could take away the protections this new law gives.

Even though there are some pros and cons to this law, Matthew C. Mullhofer Attorney explained that this new law is able to provide great protection.

Call Matthew Mullhofer Attorney at (714) 827-9955 to have your Real Estate questions answered today!