Step by Step Guide To Buying A House – Part 1

HouseBuying a house is probably one of the biggest investments a person makes in his lifetime. Not only does it cause a dent in the buyer’s pocket, the whole process of buying a house can be down right daunting and intimidating as the buyer has to deal with various parties for instance, the property agent, banker, lawyer and utility companies. I hope this series on step by step guide to buying a house will assist you in your hunt for a home.

To start off, some matters need to be mentioned. The house in question is a double-storey terrace house which is currently charged to a bank by the Vendor. It is situated on freehold land and individual title has been issued by the Land Office. The house is marketed for sale by a property agent and upon viewing the house, negotiation takes place on the purchase price. The buyer should insist on having a copy of the title or at least the title particulars so that a search can be conducted on the title at the Land Office to ascertain the identity of the current owner of the house and the existing encumbrances on the house.

Once the buyer is satisfied with the condition of the house and the purchase price, a booking fee is paid to secure the sale of the house. In this connection, the usual booking fee imposed in Klang Valley is 2% of the purchase price. Payment is made in favour of the property agent’s firm and a simple agreement is executed by both the vendor and the buyer on the important terms of the sale.

The agreement would usually include the names of the vendor and buyer, their correspondence addresses, subject property for sale, purchase price, period for payment of balance purchase price, default and dateline for signing of the formal sale and purchase agreement.

The buyer is given a receipt by the property agent for his booking fee and a copy of the simple agreement. Thereafter, the buyer has to appoint a lawyer to begin preparation of the formal sale and purchase agreement and to protect his interest throughout the transaction. In this instance, the minimal documents which the buyer is required to forward to his lawyer would be a copy of his identity card, copy of booking receipt, copy of the simple agreement, particulars of the vendor’s lawyers, buyer’s income tax number and submission branch, copy of title to the house and copy of vendor’s loan agreement. If the buyer does not have some of the documents, especially the documents which are in the vendor’s possession eg. the loan agreement, the buyer’s lawyers would write to the vendor’s lawyers for a copy of the same.

To be continued in Part 2. If you don’t want to miss Part 2, subscribe to this site’s feed for free so that you can be updated automatically.

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February 20, 2009 | Filed Under Finance, Legal | 1 Comment 

Things to Know Before Filing Bankruptcy

If you’re not sure about the proper way to file bankruptcy, you are not the only one out there. The most important recent development to know about is the Bankruptcy Abuse Prevention and Consumer Protection Act that was passed by Congress in 2005. BAPCPA has made it much more difficult to file bankruptcy, and has made the decision to do so much harder.

Before beginning the process, you should probably find a reputable bankruptcy lawyer who can assist in the proceedings. It is not illegal to represent yourself of course, but a lawyer is the only one who can truly represent you in the best way. BAPCPA has made bankruptcy so complex that it is possible that your bankruptcy declaration will not be accepted by the court because it is incomplete or incorrect.

When filing bankruptcy, you must first determine which class of bankruptcy is appropriate for your situation. The 6 different classifications of bankruptcy are Chapters 7, 9, 11, 12, 13 and 15. Chapters seven and thirteen are used solely for private citizens, and the remaining classifications are used by public or private firms and farmers.

Chapter Seven is often referred to as “liquidation” because bankruptcy filers are forced to sell their assets and possessions to pay of their debts. Certain delinquincies are exempt from being discharged in Chapter Seven including tax responsibilities, money owed in judgements from the courts, and loans from the government, including student loans.

The Chapter 13 classification is called “reorganization” and also forces the filers to repay their debts. Instead of liquidation, debtors and creditors agree upon a payment plan to cover the debt. The repayment periods usually last between three and five years, but can be longer or shorter.

BAPCPA forces bankruptcy filers to agree to a ‘means’ test; a financial assessment that is used to gauge the debtor’s median income. This test compares an individuals income to the state’s average income in an attempt to assess the fair amount that the individual must repay.

The bankruptcy filer must apportion most of their disposable income to repaying their debts under Chapter 13. While still under the terms of the plan, a debtor usually cannot assume any more debt unless previously approved. Many debtor’s under Chapter 13 are simply unable to meet their responsilities and then they must return to court to meet with the judge.

When bankruptcy filers fail to meet their bankruptcy requirements because they do not stick to the repayment plan, creditors go to the court and petition the judge to toss out the Chapter 13 petition. When the judge does this, he can decide to reclassify the bankruptcy as having Chapter 7 status or dismiss the petition completely. When bankruptcy petition gets dismissed, the bankruptcy filers lose the protection that bankruptcy affords them and the creditors will then begin collection actions, which sometimes includes foreclosure.

Once bankruptcy papers have been filled out, they must be filed at the courthouse. At this point, within a few weeks, the debtor’s find themselves in a 321 Bankruptcy Meeting. At this time, creditors are permitted to question the bankruptcy about the reason that they must file for bankruptcy, as well as their plan to get their heads above water and for repaying their debts.

Creditors do not always go to the 321 Bankruptcy Meeting, but they must do so if they want their notes to be put into the bankruptcy repayment plan. They petition must be filed at the courthouse within thirty days of the 321 Meeting.

The final part of the bankruptcy procedure involves appearing before the bankruptcy judge. The judge reads the filing to make sure that all necessary conditions for bankruptcy have been fulfilled, including enrollment in “credit therapy”. Then the judge will do one of three things: absolve debts by way of Chapter 7; sign-off on the Chapter 13 repayment; or toss out the entire bankruptcy petition.

This article is written for the United States readers. You are advised to seek legal counsel for the accuracy of the content herein as laws may have changed.

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February 17, 2009 | Filed Under Finance | Leave a Comment 

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