Being party to a personal injury lawsuit is no small matter. You could lose everything if held liable in such a lawsuit unless you miraculously have enough liability coverage. Some of the most common assets people lose are their cars, their homes (especially second homes), their life savings, and risk literally any other forms of assets remaining such as jewelry and art.
A creditor may bring you to court for an asset hearing and ask you questions about your assets under oath. You will be required to submit documentation about your assets, your wealth, and your ability to pay. An asset hearing is not an appointment you should miss, as a bench warrant could be issued for your arrest. It’s also a terrible idea to hide your assets or be misleading with details about them.
The reality is that personal injury lawyers rarely seek personal assets and instead go for insurance funds. The exception is if you are responsible for causing catastrophic and life-changing injuries such as paralysis, amputation, brain injury, or a lifelong disability. Deciding to seek personal assets is an educated guess that may or may not mean hundreds of hours and thousands of dollars trying to recover assets. Another reason why an attorney would seek personal assets is if you have wealth, but not sufficient insurance coverage. Your personal assets could be at risk if there is a disparity between the valuation of your assets and how much liability coverage you have.
WIN Injury Network is a team of medical, legal, and financial services professionals who work with clients every step of the way following an accident-related personal injury. Their experienced professionals have years of experience representing victims of negligence and work-related accidents. The work injury network helps clients win compensation for medical care and expenses, loss of income, property damage, pain and suffering, and punitive damages.
WIN injury network attorneys are experienced at representing work-related accidents, wrongful death, defective products, and motor vehicle accidents. Seeking legal services is the best way to receive the benefits and compensation you legally deserve for an accident-related personal injury.
Does pending litigation affect your ability to get a mortgage?
Lenders qualify you for a mortgage loan based on several factors. Attractive borrowers have high credit scores, stable employment, and high monthly incomes. Lenders can help you determine if your involvement in pending litigation can negatively affect your ability to make monthly payments.
A mortgage is a large sum of money which is why there is a careful evaluation of an applicant’s risk of defaulting on the mortgage. Defaulting damages your credit score and financial reputation as a homeowner, and it’s a financial loss for the lender. Mortgage companies will go out of their way to ensure that they don’t lend to an applicant who will eventually default.
Lenders assess an applicant’s risk level through credit scores, employment history, debt to income ratio, and other factors. The mortgage process can be a little tricky but with the right resources, you can go from hopeful homebuyers to an assured new homeowner. Before you can dip your toes in the real estate market though, you need to know how much of a monthly payment you can afford.
Baldwin REALTORS ® feature mortgage resources for hopeful homeowners to help them determine how much they can afford. Their online mortgage calculator lets you calculate your monthly mortgage payments based on details of the loan including the interest rate, so you can view real estate listings within your price range. You can seek home loan pre-approval from multiple lenders, and find and compare competitive interest rates. Search for brokerage firms, get in touch with the best real estate agent in the area and explore the latest real estate listings.
Pending litigations may affect how much house-based outgoings you can afford, and your eligibility for a home loan. Before setting your sights on real estate, you need to get pre-qualification for a mortgage loan.
Declaring
There’s no hiding your financial state when applying for a mortgage, as you will be required to fill out the Uniform Residential Loan Application. You will have to provide information about your annual salary, estimated monthly debts, and make declarations about bankruptcy, foreclosure, and whether you are party to a lawsuit.
Lenders care if you are party to a lawsuit because they want to ensure you won’t default on your monthly mortgage payments. Being held liable in a lawsuit may come with high penalties that will factor into your eligibility, and ability to pay back, your loans.
Gross Monthly Income
Your gross monthly income and debt-to-income ratio are big deciding factors in getting a home loan pre-approval. Lenders favor borrowers whose total monthly debt obligations are 36 percent or less than their gross monthly income. They may consider overlooking pending litigations if your debt-to-income ratio is far below the threshold, based on the assumption that you’ll still have discretionary income remaining if you lose the lawsuit. A high debt-to-income ratio with pending litigation; will likely cause lenders to deny you for a mortgage loan pre-approval.
Lawsuits and Mortgages
No matter if you are the plaintiff or defendant in pending litigation, lenders typically don’t approve applicants. Lawsuits are expensive, with pricey attorney fees, large sum damages, and court fees increasing an applicant’s risk of defaulting on a mortgage loan. Depending on your financial history, a lender may ask for more details about the pending litigation. If the lender is satisfied by your further explanation, you may be given pre-qualification on a higher interest rate mortgage loan.
Find the Best Realtor
Every homeowner benefits from the expertise of a real estate team of professionals. Whether you are a home buyer or seller; being represented by the best real estate agent will ensure you reach your real estate dreams. Matt Dejanovich – Real Estate One has over 30 years of experience helping buyers find new homes with his easy-to-use online search tool. His real estate agency in Ann Arbor, MI provides personal service to home buyers and sellers in Ann Arbor, Ypsilanti, and Dexter. You deserve the expertise of a realtor who can meet your real estate needs and handles your real estate transaction with care and professionalism.
How can liability insurance protect you?
The only way to truly protect yourself from losing personal assets in a lawsuit is to carry liability insurance. Liability coverage pays others that you accidentally cause injury to or damage the property of. Liability insurance covers property damage, bodily injury, personal injury, and defense costs for civil lawsuits. Accidents happen and in the blink of an eye, you can lose all that you have worked for if you don’t have enough insurance coverage. You are held responsible for damages and injuries caused by you in a car, in your home, or your business without liability insurance. It’s better to pay a monthly insurance premium and not need to use your coverage than to risk not having liability coverage and facing financial ruin.
Depending on your financial history and the outcome of your pending litigation, you may or may not be able to qualify for a mortgage loan. Be open and honest when seeking lenders as they may be willing to look deeper into your application and situation. The best way to avoid finding yourself in this situation is to ensure you have enough of the right type of insurance coverage at all times to protect you from the unexpected.