Help! I Can't Afford My House Payment

What do I do if I can’t afford my house payment?

It's not uncommon for seniors to find themselves unable to afford their house payments. This usually occurs during a period of instability, maybe when a spouse passes away or a source of income is lost. If your home is worth more than what is owed then you could sell it. You can find the value by calling a realtor and getting a market analysis of what your home would sell for without any improvements. If you would come away with some money after the realtors commission you could list your home for sale. You can even stop making payments while it's up for sale.

Where it gets a little tricky is when there is little or no equity in the home, meaning you can't sell it for enough to pay off the loan and cost of selling it. In that situation you can stop making the payment (remember: you can’t afford the payments and there's no equity), and live in the home while it goes through the foreclosure process. At HELPS we've had seniors living in homes without making a payment for one, two and sometimes three or more years. You don’t have to move when you stop making payments. Truth be told, the banks want you to stay in the home; it's safer and worth more to them occupied during this period. The mortgage contract allows you to stay so there's nothing wrong with this choice, it gives you time to save money for a future move and increased notice on when you'll have to leave.

Then you ask: will I owe money to the bank when the home is foreclosed? What about taxes? You may owe money on the mortgage, depends on which state you live in, but if your income is strictly Social Security and pension it's protected from collectors. That remaining mortgage, if there is any, simply gets added to the list of creditors, and they can’t collect. In most instances there's never even an attempt at collection. It's doubtful that you'd owe taxes because of a foreclosure. Our clients are generally classified as “insolvent” with the IRS so there are no taxes, if taxes were owed the client can be placed on an noncollectable status with the IRS. Otherwise you may owe taxes. 

by Eric Olsen President | Attorney

Identity Theft Part 2: What to do if Your Identity has Been Stolen

Last time we delved into what to do to prevent identity theft, but what do you do if you see signs your identity has been stolen? Everyone thinks of filing a police report, which is a great first step because it demonstrates to the credit companies that you are serious, but there's more to do to ensure you won't be held accountable for losses. For this entire process you will be making calls, sending and receiving letters. This should be documented in its entirety and hard copies kept in case you have to dispute the information later.

There are quite a few tip offs that your identity has been stolen. Unexpected withdrawals from your bank account, missing mail, or being refused health coverage because records show a condition you don't have. You may find unfamiliar accounts or charges on your credit report or receive medical bills or collection calls for accounts you never opened or treatment you never received. You might also be alerted by the IRS notifying you of multiple tax returns filed in your name or of income from an employer you don't have.

After filing the police report you should place a fraud alert on your credit reports. Contact one of the credit reporting companies and make the request; this agency is then required to inform the other two main reporting bureaus. To place this alert you will need to prove your identity. The alert itself makes it harder to open more accounts in your name since it mandates that businesses verify your identity before issuing credit. It will stay on your account for 90 days unless renewed. During this time the credit reporting agency will investigate your claim and act upon it so you should make sure to update your contact information so they can give you the results.

As a result of the fraud alert you are entitled to an additional free credit report which you should request and inspect for errors. First check key information like your name, address, Social Security number and employers. Then check for errors like accounts you didn't open and debts that aren't yours. You should put all errors that result from the identity theft into an Identity Theft Report and request that the disputed information is blocked from your credit report.

To dispute it you will have to write all three agencies explaining that you are a victim of identity theft, listing the errors (with documents), and a request that the information be removed. The companies must investigate those errors through the businesses that reported them within 30 days. They will send you a letter with the results: either maintaining the info in your file or removing it. You can appeal this decision if it's not favorable.

After contacting the credit reporting agencies you should contact the businesses that reported the errors, ask for copies of the documents used by the thief (new accounts or those with charged purchases), and change your PIN and passwords. If you don't want to do this yourself you can also give permission to law enforcement to contact them for you (although you should still change your passwords). If you have the information, you should send details about where and when the fraudulent transactions took place. You can include a copy of your Identity Theft Report or the business may have their own form. You will also need to prove your identity.

To dispute any errors on the documents you should write the fraud department (use the address provided for disputes) and explain that you're a victim, list the errors, provide documents with the errors, your credit report (black out all information they don't need) and the Identity Theft Report or equivalent. You should request that they remove any fraudulent information and send you a letter confirming the removal. To dispute an account you didn't open you should do pretty much the same thing but confirm it has been closed and removed from your credit report.

If you think a thief has submitted a change of address you should contact your local Postal Inspection Service.

If you think your Social Security number is being used fraudulently you should contact the Social Security Administration.

You can also contact the Federal Trade Commission to find out about resources available to help you.

Identity Theft: Prevention

This is part one of our two part series on identity theft where we are discussing what preventative measures can be taken against identity thieves. Next time we'll look at what should be done if your identity has been stolen. In 2012 around 16.6 million people in the US over the age of 16 were the victim of identity theft (more than 10% of those being over 50) and 68% of them reported financial losses associated with it (average loss of $1,769).

Your identity can be stolen from anything that has personally identifying information (PII) so you should consider anything of the sort “need to know.” There are many ways crooks can get your information: breaking into websites, convince you to type it into online forms/ emails, using skimmers when handling your card or hiding them on ATM machines, gas stations, a waiter may while taking a payment for your meal. Con-men also may try to get information from papers that aren't properly disposed of diving through dumpsters and opening pre-approved lines of credit or taking your account numbers.

Fourteen percent of people will experience identity theft at some point in their lives, what can you to to protect yourself from it?

Protect your mail by...

• Not using a traditional mail box
• Instead get a PO box, a mail slat or a mail box with a lock
• If you have a mail box and no intention of giving it up:
  • Remove mail promptly
  • Take outgoing mail with PII to the post office
  • Don't have a new check book mailed to it
  • Opt out of pre-screened credit opportunities
• If you go away from home request a vacation hold

Protect your information when using technology by...

• Not giving away PII by phone or over the internet unless you initiated the contact, know the company and are confidant you are actually on their web page (some phonies are very convincing, watch out!)
• Don't click links in emails
• Don't post too much information on social media, this includes dates of vacations, thieves look for that!
• Always personalize the privacy settings on your websites
• Don't send personal information over public WiFi (more information on why here)
• Avoid entering your PII into websites that have http instead of https at the front, the s stands for secure (this won't always be possible right now, since websites are still in the process of updating)
• If you sell or otherwise dispose of your computer wipe all the info and overwrite the hard drive first

You can protect yourself in general by...

• Only carrying the identification and payment cards you need for that outing and unless you need it NEVER your social security card!
• Consider your info “need to know”: if a location requests it ask why, how it'll be protected and what the repercussions are for not providing it
• Don't sign your credit card instead write “photo ID required”
• Destroy labels on prescription bottles before disposing of them or alternately see if your hospital, recycling center, or pharmacy takes them
• If you write checks to pay credit card bills don't write the full account number, just the last 4 digits
• Don't have your Social Security number printed on checks, ideally don't have your home address either
• Photocopy both sides of everything you carry in your wallet. Keep the copies in a safe place so you maintain account numbers and phone numbers
• Shred all receipts, credit offers, credit applications, insurance forms, physician statements, checks, bank statements, expired cards, and any other documents with PII
• Lock all financial documents and records in a safe place, keep the key off site if you can
• Check your credit reports and bank account statements for discrepancies regularly

Next week we will go over what to do if your identity has been stolen. What may be reassuring for people who have just discovered that their identity has been stolen is that 86% of people resolve the issues that arise within 24 hours.