How to Save Money Handling Your Own Legal Matter

“Sixty percent of bankruptcies and seventy-five percent of divorces in California are done without lawyers,” according to Do It Yourself Documents, a self-help legal book and kit retailer. With the availability of so many quality self-help legal resources today, it has never been easier to handle your own legal matter. I will tell you what self-help resources are available and how to use them.

Although the information I am about to give you is based on research and experience, always remember that only a lawyer is qualified to give you sound legal advice. I am not a lawyer, but I have worked extensively in this field. Use any of the products and services I mention here at your own risk.

You have several choices when trying to handle a legal matter without a lawyer. You can do the matter entirely on your own with a self-help book or kit; you can handle the matter with aid from an independent paralegal or legal assistance program; you can handle the matter through a program such as Pre-Paid Legal Services.

SELF-HELP BOOKS AND KITS

The market is saturated with self-help legal books and kits. Which ones can you trust? HALT, an organization of Americans for legal reform, has reviewed many popular self-help guides. On their website, you can find their “Do It Yourself” section, which has helpful product reviews. In general, I will save you time and tell you HALT repeatedly recommends products from Nolo Press. All of Nolo’s books and software are created by lawyers and are updated constantly. I also recommend products from Alpha Publications. I do not recommend products from Info America or similar publishers.

Kits and books you want to stay away from are those that are not updated frequently and not written by experts. Make sure the book or kit has a help-line from the publisher you can call if you need assistance. Also, does the kit/book include the forms you need? Does the kit/book have a CD-Rom so you can type the forms on your computer? Remember, you get what you pay for.

Before you buy anything, however, I recommend you check your state court system’s website because many states provide both forms and basic instructions for free. For a complete list of state-specific resources, try DoItYourselfDocuments.com. On the left side of their homepage, find your state on the drop down menu, then scroll to the bottom of the page for your state.

If there is a state-specific version of the kit or book you want, buy that one. For example, there are many national divorce kits intended for use in all 50 states. I have never seen one of these books or kits that was useful.

INDEPENDENT PARALEGALS AND LEGAL ASSISTANCE PROGRAMS

Independent paralegals are paralegals that do not work under the supervision of attorneys. In California, independent paralegals are licensed, bonded, and use the title “Legal Document Assistants.” Currently, California is the only state to regulate independent paralegals. For the California Association of Legal Document Assistants, visit their website at http://www.calda.org

An independent paralegal can provide you with the forms you need for many routine legal matters and assist you with filing your documents. Typically, independent paralegals are knowledgeable about local court rules and other nuisances you may not find in a self-help book or kit. The price? Usually, 1/3 of what you’d pay for an attorney.

If you live outside of California, be sure you hire an independent paralegal with a paralegal certificate from an American Bar Association approved school. Many times, independent paralegals with 15 years of experience or more do not have these certificates because they were not needed years ago. You may want to ask the independent paralegal what, if any, continuing education s/he obtains over the course of a year to stay up-to-date on training. Also, how long, if at all, s/he worked under the supervision of an attorney to gain the required knowledge to assist you. Finally, ask if the independent paralegal is a member of a professional association or has any special certifications.

There is only one national independent paralegal franchise to my knowledge, and that is We The People. We The People does not require their owners or operators to have paralegal certificates; however, they do provide in-depth training from the company on all the types of legal matters that they cover. We The People has been in business for over 20 years.

Like the independent paralegals described above, there are also “attorney assisted” independent paralegals. These attorney-assisted paralegals typically perform the same services as traditional independent paralegals but have an attorney proofread their documents or oversee their work in some way. Prices are typically about the same or slightly higher than traditional independent paralegals.

As for legal assistance programs, most states have “paperwork helpers” in the courthouse to assist you. In California, these are called Family Law Facilitators. These programs are free to everybody; they are not legal aid, which is only available to people with low incomes. There are also occasionally programs through local civic groups, such as the YMCA, that provide similar assistance.

PRE-PAID LEGAL

There are many types of legal insurance, but the most established is Pre-Paid Legal Services ( http://www.prepaidlegal.com ) For about $25-$30 a month, you can call a “provider law firm” and get legal advice on any matter. If you decide to use the “provider law firm” to handle a legal matter on your behalf, you typically receive some kind of discount. Some programs include free preparation of a Last Will and Testament for you and your spouse. Like any insurance, you can cancel your membership at any time.

If you wanted to do a more complex legal matter on your own, you could obtain a pre-paid legal membership and call your provider law firm any time you had a concern. If desired, cancel your membership when your legal matter was resolved. Be very sure that each time you call your provider law firm, you make it clear that you are not calling about the same thing you previously called about. They will charge you if you do. Be very specific and say, “I have called about this issue before, but I have a new concern…” Be prepared to wait a day or two for the provider law firm to call you back with your requested advice or information.

Many employers offer pre-paid legal insurance as a benefit. Before you sign up, be sure to check with your employer–it may be completely free to you.

Do You Measure Up? Proving That Legal Departments Are More Than a Cost Center

General Counsel (GC) across most industries remain under pressure to operate efficiently, cut costs and maximize existing resources. In order to properly measure just how successful a Lawyer is operating today under these mandates, it is vital that in-house legal teams have a system of metrics and measurements in place. By measuring efficiencies, GCs can demonstrate their value to the organization and can provide proof points that help their legal department gain the trust and respect of company executives.

Are GCs on board?

In a recent survey, GCs were asked, “Do Metrics Provide a Useful and Accurate Measure of the Legal Department’s Value to the Business?” In response, 66% of General Counsel (GC) said that metrics do not provide a good measure of the legal department’s value. Additionally, most GCs reported that they do not use metrics to assess the legal department’s performance (58%), and they do not believe that metrics assist in analyzing the legal department’s value (66%).

Measuring cost vs. value

Why? When considering Conferences metrics generally, they are most often designed to measure only the legal department’s cost to the organization, rather than the department’s value. For example, the most common metrics in legal departments are:

* Legal expenses as a percentage of corporate revenue

* The cost of outside counsel

* Internal Legal Process Outsourcing department costs

* Cost per matter

* Average billing rate

It’s easy to see that these metrics are more about cost than value. To accurately capture value, a legal department needs to tell a complete and balanced story and show not simply the dollars being spent by a Lawyer, but how much that department has saved the organization from spending or losing. There are a number of methods to measure both the tangible and intangible value of a legal department. Here are a few:

* Feedback from client surveys that focus on quality of service, efficiency, commerciality and communication

* Assessing matter success rates

* Calculating dollars saved by negotiating better rates or AFAs with outside counsel

* Documentation of the where the LPO team added commercial value in a matter

* Tracking of the actual risks that were avoided

* Tracking the cost of internal legal resource against external hourly spend

* Regular reports to the business and/or board of directors

Going back to the aforementioned survey, most GCs believed their in-house legal teams were viewed as both legal counsel and strategic business partner. In fact only 19% reported that their in-house teams were seen purely as legal counsel. This demonstrates that GCs are being asked to play a greater strategic role in their organizations. It also reinforces the need for GCs to use metrics to prove value. As we approach mid-year, GCs will likely continue to search for new ways to heighten the efficiency of their departments, while working steadily to provide more value to their organizations as strategic partners.

Legal Forms, Documents, and Contracts Can Save Time

Lucy Lawyer, a junior corporate associate at a small New England firm, is working diligently on her first acquisition involving a manufacturing plant for a new client, an Illinois corporation. Brian de Partner tells her that she needs to prepare the authorizing resolutions for their buyer client. Lucy has never done resolutions for an acquisition before nor has she ever prepared resolutions on behalf of an Illinois corporation. Her work comes to a grinding halt. Brian de Partner is very busy and asks her to figure it out. Where does she turn?

How often are we, as legal professionals, frustrated by the realization we’re not sure what steps to take to accomplish a particular task in the best practice way?
Most legal projects do not start as a blank slate. They may involve deal specific terms and provisions but, for the business practitioner, they very often involve universal “core information” as required in many other projects. For the legal professional, that means gathering and accessing the proper tools to initiate and perform the project at hand. It may be locating a good initial drafting form. It may be searching for a link to a relevant statute. It may be finding a seasoned paralegal to consult. But there are always certain procedural resources that the practitioner will utilize on a repeat basis to perform the legal work most efficiently.

When those tools are not readily available it translates into lost productivity and ultimately lost revenues; time is wasted.

The legal industry has hundreds of vendors offering various legal resources. Westlaw(TM) and Lexis(TM) are industry standard sources for substantive research for the litigation professional: citations, treatises and other legal information. Resident agent service companies such as National Registered Agents, Inc. (www.nrai.com), CT Corporation, and many others provide excellent web sites for obtaining state forms and state-specific filing information.

Human Resources Outsourcing: A Three-Way Winning Opportunity

Employers have long been familiar with the benefits of outsourcing. From payroll and legal services to IT support and janitorial services, businesses recognize the value of focusing on growth and development, while vendors pick up the slack of non-strategic, non-revenue generating activities.

In recent years, small and mid-sized employers have expanded their outsourcing-horizons to outsource many of their Human Resources functions. HR Outsourcing firms take over the complex and oft-mismanaged tasks relating to employment and HR compliance. Business owners recognize that management is best utilized developing and training their staff, instead of sifting through paperwork, surfing the web for compliance policies, and processing insurance claims.

HR Outsourcing firms manage the entire ‘life-cycle’ of an employee, from hire to termination. Administrative support includes:

Hiring Practices
New Hire Policies and Handbook
Employee Training
Employee Benefits Policies & Administration
ACA Compliance
Employment & HR Compliance
Payroll & Tax Administration
Safety & Risk Management
Workers’ Compensation Insurance
Progressive Discipline & Termination Practices

Outsourcing human resources provides a triple-benefit to employers:

1. Reduce Overhead and Operating Costs

Experienced HRO firms have worked hard over many years – and sometimes decades – to forge solid, long-term relationships with many large vendors, insurance companies and service providers. By representing thousands of employees, the HRO firm successfully negotiates deep discounts in service fees and premiums. These rates are then passed through to their clients. The economies-of-scale generated by the HRO offers small employers access to rates and programs typically only available to Fortune 500 corporations.

The reduction in rates and costs can be experienced in many areas. Some examples include:

Workers’ compensation premiums
Group health insurance rates
Employment Practices Liability Insurance
Voluntary employee benefits (life, disability, vision, etc.)
401 (k) and Cafeteria pre-tax plan administration fees
Payroll processing and tax filing services
On-site safety consulting
Management training courses

2. Employment Liability Protections

Year after year, the federal government and state legislatures pass new laws or change existing legislation that directly impact the way employers do business. For small and mid-sized employers with little internal legal support or human resources expertise, this is like building a house in quicksand. The employment ground keeps shifting, and only experienced legal experts who are ‘plugged into’ the new laws can safely understand their impact on employers.

HR Outsourcing firms employ teams of seasoned human resources professionals and in-house legal counsel. Day in and day out, these employment experts stay abreast of the changes, and pass this information directly to their clients. Whether there are recently issued guidelines regarding new laws such as the Affordable Care Act/Obamacare or social media policies, or changes to existing laws such as minimum wage, the ADA, or Title VII, clients who outsource their human resources to professionals can confidently move forward knowing their business is in compliance.

3. Employee Development and Productivity

At the end of the day, it is the people within any organization that will make or break its success. Study after study shows that employers who invest in their employees have less turn-over, produce more productive and motivated staff, and are ultimately more profitable.

“Investing in employees” can take many different forms. Most fundamentally, it is offering a solid benefits package including major medical, dental, vision and other voluntary benefits. However, it doesn’t stop there. Employers who create a positive work-environment and who recognize their employees’ hard work will ultimately produce a more dedicated and hard-working workforce. Examples include incorporating incentive and recognition programs, offering a flexible work-week, regular company events, and conducting regular employee reviews and continuing education opportunities.

HRO firms are in the position to provide these programs and insurance products to their clients. They will also walk them through the creation and implementation process, and assist in tweaking the programs as they develop.

In conclusion, human resource outsourcing firms offer a three-way winning combination for their clients. The financial team will be thrilled with the reduction in employment overhead and insurance costs, management will comfortably do their job knowing someone is watching their back, and the employees will give 100% for the business, knowing they are a truly valued human resource.

Ari Rosenstein is the Director of Marketing at HR Outsourcing company CPE, a firm specializing in labor law compliance and PEO services. It currently services over 600 clients representing 75,000 employees nationwide.

CPE was founded in 1982 and assists small and mid-sized employers with the management of their employees and employment compliance. It provides a range of employment services, such as HR administration, safety, payroll, employee benefits, training and recruiting services.

4 Benefits of Hiring a Legal Transcription Outsourcing Company

Outsourcing legal documentation tasks has become a convenient option for most law firms. Legal entities have to spend considerable time, amount and resources for carrying legal transcription tasks in-house. They stand to gain a lot when they entrust the task of to a reliable service provider. An experienced legal transcription outsourcing company helps lawyers, attorneys and other legal professionals to get their documentation work completed quickly and accurately and save the time and money necessary to do this task within their office.

These firms can provide documentation solutions for all types of legal audio and video recordings – court tapes, court transcripts, depositions, motions, jury instructions, pleadings, client letters, and more.

Advantages of Partnering with the Right Service Provider

Outsourcing legal documentation jobs to a professional company can offer solid advantages in terms of money, resources and time. Four main benefits of hiring a professional legal transcription outsourcing company are

• Error-free, Timely and Secure Legal Documentation – Law firms deal with a wide variety of legal documents on a daily basis. A reputable legal transcription outsourcing company can provide accurate legal reports and documents in time to meet even the most stringent legal deadlines. They would also ensure complete confidentiality of data provided for transcription with several measures for safe handling of the files as well as secure modes of file transmission through the Internet.

• Top QA system – A professional transcription company is dedicated to providing top quality transcription services for its clients. As part of this, it would have a standardized QA system in place to deliver highly accurate results. Multi-level quality checks are implemented to provide results with an accuracy level as high as 99%. Experienced and skilled editors, proofreaders and legal experts check the transcripts for accuracy before delivery.

• Cost Savings – Outsourcing legal transcription tasks is more cost-effective than doing it in-house. Choosing a reliable and experienced outsourcing partner will cut down the overall operational costs by at least 30-40% which is lower than current market rate. Also, costs for appointing transcription staff and other hidden operational costs can also be saved. It is very important to select a firm which offers quality based transcription services at affordable rates.

• Time to focus on core tasks: With the right transcription company, clients can be assured that they will have more time to devote to their core tasks. The company will provide them with an efficient document management system so that can share, retrieve and archive their transcripts. This will improve their productivity and workflow efficiency.

Most professional transcription companies offer 24/7 support services, which is very useful for legal professionals. They can avoid documentation backlogs and carry out their tasks more effectively by hiring the right legal transcription outsourcing company.

Legal Documents and Forms – The Need of the Hour

It is quite essential for you to understand the significance of legal forms and documents in your day to day lives. There are many occasions where you need to handle legal documents, like – when you buy a car, make a business proposal, sell your house, accept the business contract, hire a contractor or make a deal with the third party. Of course, you will prefer to seek the help of some legal expert to avoid any mistake in your legal document. However, it will be quite costly to hire an expert for trivial matters coming across in your way. Therefore, people have started using legal document templates to simplify the process of writing legal papers on their own.

There are many web resources where you can find the steps involved in legal writing along with the details of legal clauses. However, not every piece of information is useful on the practice front. You may get totally confused when you go through many websites that present contradictory guidelines for writing legal forms and documents. However, this does not mean that the web resources provide wrong information to the readers. Actually, the information present on the web is written in accordance with the regional laws. Therefore, if you are dealing the matters locally, you have to make sure that you follow the laws prevailing in your own region. Besides this, you should check the previous documents which were handled by your legal expert. You will get a hint of important points that must be included in the current legal documents.

It will not be a wrong decision to employ legal document templates for making yourself self-sufficient in handling those legal documents that are required most frequently. At least, you will not have to invest ample amount of time in selecting proper format for writing your document or form, since it will be drafted automatically with the help of software. All you need to do is to provide the required information. You can also make little changes on the document… like add some note or clause or insert your company’s logo.

Furthermore, using software for drafting legal forms and documents guarantee that you have not missed the vital information that must be there on your document or form and which could result in rejection by higher authorities. However, if you want to fulfill your responsibilities with utmost perfection, then you must increase your knowledge base so that you do not have to rely upon some other person for legal advices.

It is true that when you prepare drafts for legal documents, you have to be attentive towards spelling and grammar errors. If you use legal document templates, you will be assured of the fact that your legal documents are error-free in terms of grammar and spellings.

How to Handle Legal Issues When Family is Involved

Most family squabbles involve some yelling and maybe a punishment or two but they usually end without the problem ever leaving the walls of the home. However, there are instances, when family problems are so involved and complicated; there may be no choice but to hire someone to help. When families undergo major changes there are often times that the advice of a legal professional is needed. In other cases, disputes become so intense, legal professionals must be brought in to wade through the issues. Finally, legal issues can arise during the happiest of situations, but it is often better to have things arranged by a knowledgeable professional, in order to avoid problems in the future. If you and your family are experiencing problems or changes, there are a variety of legal resources you can call on. If the end of a marriage is in sight, it is important for all parties to have someone representing their personal interest. Call on the services of a divorce lawyer or divorce attorney to ensure your interests are protected during the proceedings.

If your family issue is a pleasant one, you may still need the assistance of a legal professional. Those who are engaged and looking forward to their marriage may want to arrange a prenuptial agreement to protect their personal property once they are married. Laws concerning marriage property differ from state to state, so even if you think you know how things will be handled, it is important to be sure you are protected, should the unforeseen occur. There may be other reasons engaged or newly married couples may seek legal counsel, including custody of children from a previous marriage, real estate matters, or adoption. Each of these is a positive, happy issue, but it is always better to bring in the advice of a legal professional to be sure you and your spouse are fully protected and that you are doing everything you are supposed to do.

Finally, it is important to understand there are a lot of legal matters surrounding the death of a family member. No one wants to think about the legal issues during their time of mourning, but unfortunately, a number of matters must be handled within a short period of time following the death. If the cause of death is suspect, it is important to have legal representation. This may seem like something that would affect very few people, but something as simple as listing the cause of death on the death certificate as something that is vague can lead to inquiries by law enforcement officials. In other cases, things may run smoothly, but when it comes to the reading of the will, a legal professional will need to be present. Should there be any disputes concerning the property of the deceased, it is better to have someone experienced with these matters step in and handle the division of property. Matters of inheritance are where even the most peaceful, friendly families run into problems, and if a legal professional is handling the proceedings, it can avoid some hard feelings between relatives.

Forming a Business Enterprise – The Legal FAQs

When it is about starting a new business there are several key decisions to be made by you regarding organization structure, financing, management and operation and many more. The most important aspect we generally ignore is securing the business establishments with legal regulations and permissions. The basic homework a business owner should concentrate on before even thinking to start an entity.

Believe it or not, without finding an attorney and free legal resources or documents your knowledge won’t be complete. Here the specifications are about New Mexico Business law, though the primary level rules are same all where for a particular state in US.

Here we can run a brief session to take you through the basic functionalities of business law with much appreciated help from New Mexico Business Attorney. Finding answers of these inquiries would enable you take a wise decision.

Do you need a license or permit to open your business account?

It depends on the type of your business. Certain trades require special permissions or licenses. For example professional service like doctors, teachers, lawyers, accountants and commercial trades like alcohol manufacturers, fire arms producers need these.

Do you need a Taxpayer Identification number for your business?

Yes, most of the companies do this by filing with the IRS to receive an Employer Identification Number (EIN). This is to identify companies and their workforce. Those who can’t afford EIN should have a social security number at least.

How do you register yourself for an online business?

This is basically registering the domain name i.e. selecting your website address. You need to find the domain name customized to your business and check whether it is already registered or not. Ask for some good referrals of legal directories.

Do you find sole proprietorship advantageous for your business?

With sole proprietorship you can avoid any special legal construct in your business and enjoy exclusive right to make business decisions. Since there is no corporate taxes, filing fees or negligible legal fees associated with it the process is inexpensive.

Do you find Limited Liability Partnership a good option?

Again it depends. The advantage is – Each partner is personally liable for his or her own negligence or of the employee under his/her supervision. But the rule doesn’t comply while incurring debts.

How to form a corporation?

There are few simple steps:

1. First of all select your business name. Ensure you have passed the state rules and the words or phrases used in your business name don’t defy State laws. Visit the secretary of your state’s website.

2. Start preparing and file the necessary paperwork with the Secretary of state in the State of incorporation. Pay your filing fees.

3. Choose the board of directors, directors, officers to form corporate governance. A business Attorney would guide you on that.

4. Issue stocks to the owners, set up bank accounts, bookkeeping system, collect licenses, permits from local Government offices; opt business insurance, purchase office equipments, hire employees.

With all these strategies you can run your business smoothly.

Stressful Divorce Issues Encourage Need For Legal Assistance

Consider this hypothetical advertisement running in a Tampa Bay area newspaper: Wanted, divorce lawyer Safety Harbor or divorce attorney Pinellas County Florida. Please help. Desperate situation. Must hire soon. People will do just about anything to find good representation for their separation proceedings. The common man or woman is not well-educated in complex legal matters. There can be a great deal of frustration while wading through the details involved in the dissolution of marriage, particularly when one is already emotionally consumed by the separation itself. That is why the majority of people who are either petitioning a marriage dissolution or responding to a request for this dissolution hire competent and experienced legal representation. There are a few legal areas of particular importance to a number of people. Areas so important that they literally may change the way a person will structure their post-separation life. Areas that can be so mentally stressful, many people simply do not know how to proceed without the help of their representative.

The first area most people find at best stressful, at worst contentious, is the matter of asset distribution. There are few things more personal than having one’s financial records analyzed. Every financial decision, be it good investments or ill-advised ones, purchases made, debts incurred, and charitable giving records, are all deciphered. A couple’s joint assets are determined using all these records. Additionally, a couple’s net liability is also discovered. Once these figures are determined the process of distribution can begin. Certainly, not every situation is as easy as a fifty-fifty split, but the goal of the proceedings is to find a palpable solution for each party.

Child custody issues are another area where a great many couples are unable to calmly compromise without the assistance of their legal representation. Deciding upon a custody arrangement can be one of the most hotly contested areas involved in ones separation arrangements. The wishes of both parents are taken into consideration, as well as their ability to ably care for their dependents. The determination is made based on what is deemed in the best interest of the child or children. This can be an extremely personal and emotional part of the proceedings, both on the part of the parents and the dependents.

Once custody arrangements are agreed upon then comes the matter of child support. Like custody concerns, child support matters can be a very difficult thing to agree upon. Each parent is likely to have their own ideas about what is financially feasible. Additionally, if there is any bad will left over from a drawn out custody battle, one or both parties could be very disagreeable. This is where legal counsel can be of great service. Able to separate fact from emotion, one’s representative can fight for their client’s wishes. Furthermore, they can prepare their client for probable outcomes, should they face circumstances beyond their wishes.

Using the appropriate legal resources can help someone during this most difficult time in life. Extraordinarily difficult areas involved in a couple’s separation can be made much more manageable through the help of good counsel.

Homeowners Not Behind in Mortgage Payments Have Few Legal Resources to Work With Lender

For homeowners who are not behind on their mortgage yet, but are worried about falling behind, it may seem that their bank is acting quite illogically. Most banks refuse to accept a short sale or modify the terms of a mortgage unless the owners are numerous months behind in payments. The homeowners come to the bank to ask for help to avoid foreclosure before it happens, but the bank says they can not offer any actual programs until there is a real danger of foreclosure. But by this time, the homeowners may not even qualify for a solution because they are too far behind.

Unfortunately, systemic stupidity and shortsightedness are not crimes in America (yet), so the banks are able to get away with this circular logic which pushes people into foreclosure in order to save their homes from foreclosure. In such cases, the owners of properties may feel like they have very few legal resources available to them. They are right to feel this way, as the courts can be very inhospitable to homeowners trying to work out a solution to foreclosure without actually being in default.

In essence, their legal resources probably involve very little more than negotiating with the lender to change the contract as written. But this brings into play the situation where the bank refuses to negotiate the mortgage there are no missed payments. Thus, homeowners who make payments on time are rewarded with no extra help when attempting to sell in a down market, while those who are unable to pay the mortgage are given numerous concessions which may lower the rate or allow them to sell for less than the total amount owed and help them stop foreclosure.

If the homeowners have any evidence the mortgage company has not been keeping up its end of the mortgage contract, they could sue the bank for defaulting on the contract and try to discharge the mortgage loan entirely. Obviously, banks and courts do not look too favorably on this, even if the bank has committed egregious acts of mortgage fraud or servicing fraud. If homeowners could prove that banks are criminal organizations and have their mortgages discharged, politicians and bureaucrats who receive much of their power from the banks would be quite threatened. So this legal resource is open in only a very small number of blatant cases or class action lawsuits.

The possibility of mortgage fraud may be present if the homeowners were given a really shoddy loan and not informed of various aspects that would cause penalties or higher payments. For example, many states still allow the bank to attach a prepayment penalty if the loan is paid off too quickly, and many homeowners are coming out and stating they were not aware of receiving adjustable rate mortgages until their payment doubled. If they signed a piece of paper disclosing these types of aspects but did not ever bother to read that piece of paper, though, they might be out of luck showing how they were tricked into a particular mortgage.

Otherwise, homeowners in these kinds of situations could use the legal resource of bankruptcy to stop foreclosure to establish a payment plan for the housing debt and unsecured credit lines, but that would not make sense since this article is about those who are not yet behind on the mortgage. Bankruptcy is a legal method for dealing with a mortgage loan and other creditors, but it would not be appropriate for people who are not behind, since judges are not currently able to lower the total amount owed to reflect the current market value of a house. There is some talk in Congress to change this and allow judges to adjust the total debt, but it is unlikely to result in any more than talk.

Unfortunately, getting a second home that is more affordable and letting the first one go into foreclosure might be the option that stubborn banks push homeowners to consider. Seems a bit ironic since the lender will be hurt much worse in this situation than the homeowners. But if the homeowners are not far enough behind on their mortgage to qualify for a solution, but will not be able to keep their home for much longer, and it is unlikely the bank has done anything legally wrong (and stupidity on the part of a bank is perfectly legal, or else we wouldn’t be able to have banks), homeowners have very few legal options to make the lender negotiate on a mortgage that is not in default.