Bankruptcy and Loan Modifications

Posted on in Debt Relief

Cook County bankruptcy lawyer, loan modificationFalling behind on one debt can cause a cascading effect on other debts. Credit card bills, school loans, and mortgages are some of the most common reasons why people to fall behind on their financial obligations. Debt can quickly get out of hand leaving some confused, desperate, and vulnerable.

Is Bankruptcy My Only Option?

There are ways where one can avoid filing a bankruptcy or ways to use bankruptcy in tandem with other debt relief measures.

Asking for a loan modification or loan restructure is one way that people are able to get current on their mortgage payments if they have fallen behind. A loan modification can help in the following ways:

  • Reduce your monthly mortgage payments;
  • Bring you current on your mortgage payments;
  • Reduce the interest rate on your mortgage; and
  • Reduce the principal balance on your mortgage.

There are governmental programs available to assist you with securing a loan modification; however, it is wise to speak with a knowledgeable foreclosure defense lawyer. An attorney can help you gain full access to the information that can help you determine what program you should pursue, if you qualify, and what the steps to take to move forward. The type of loan you have will also be a driving factor in the options available to you. Each type of loan carries with it a set of qualifying criteria.

Behind on Your Mortgage, Car Note, and Credit Card Bills?

This is becoming an increasingly common event as the middle class continues to slip away into oblivion. In this scenario, most will file a Chapter 7 bankruptcy to annihilate their debts or will file a Chapter 13 bankruptcy to consolidate their debt over a period of time. However, this is not the only option.

It is possible to have bankruptcy and a loan modification work hand-in-hand with one another. For example, if you have already filed a Chapter 13 bankruptcy and have placed your past due balance on your mortgage inside of your bankruptcy, you can have that debt pulled out and added to the amount of past due payments you are attempting to have modified in your loan. What does this accomplish?

  • Lowers the amount of your trustee payments in your bankruptcy; and
  • Allows the full amount of your past due balance to get modified.

You Have Options, Use Them

Falling behind on your financial obligations is a gut-wrenching and terrifying ordeal. Frequent calls and harassment from creditors, the fear of losing your home, and going through a wage garnishment are all stressful events and rather aggressive consequences that no one deserves.

For over 17 years, Attorney Eric Zelazny has defended his clients’ rights in bankruptcy and tax law matters. Do not make the mistake of feeling hopeless and that there is no way out. Contact our Cook County bankruptcy lawyer at 708-888-2299 to schedule a free consultation.

Sources:

https://www.thebalance.com/mortgage-loan-modification-and-bankruptcy-4067663

http://www.bankrate.com/finance/debt/take-loan-modification-while-chapter-13-bankruptcy.aspx

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