Chapter 13 Bankruptcy Is King When It Comes to Foreclosure
When all else fails, filing for bankruptcy may be the only way to hang on to the family home and get your creditors off your back.
By filing for Chapter 7 or Chapter 13 bankruptcy, property repossession proceedings can be stopped until an agreement with the lender has been reached.
However, most financial counselors say that filing chapter 7 bankruptcy should come only as a last resort since a consumer's credit history can be irrevocably damaged.
If a borrower has the income to get back on their feet to the point of attaining a new loan, this loan can be used to pay off the old mortgage and get the fresh start needed.
For debtors that are suffering from a job loss or other financial disaster, the only option is to give up the property all together and walk away.
After checking all their options a borrower might see that there is just no way to retain ownership of the beloved home.
In this case there is no reason in spending more money to try to hang on to the property, walking away may be the best option.
There are many reasons why a property might be foreclosed on.
Any number of circumstances can cause individuals to see themselves face repossession.
If a homeowner becomes ill and is no longer able to work, this can result in a default on monthly mortgage payments.
An unexpected job loss can also lead to inability to make the mortgage payments.
Tragedies such as the loss of a family member might mean that surviving members of the family struggle to make ends meet.
One major mistake that homeowners who find themselves facing such a disaster might is that of failing to reach out for help.
Unfortunately, many individuals will hide an impending home repossession out of embarrassment or shame.
Of course, a foreclosure will not stay hidden forever, in time it will become a matter of public record.
Admitting the problem and reaching out for help and possibly even filing for bankruptcy can sometimes make the difference between losing a home and keeping it.
Many times homeowners wait too long to acknowledge a notice of foreclosure, doing this they may be forfeiting the chance to turn the situation around.
Even in the event of a notice of repossession, all is not lost.
There are steps that a homeowner can take.
Some lenders will allow borrowers to work out a deal beyond just the original lending terms that were established when the loan was signed.
These solutions could come in the form of the short pay or mortgage modification.
This basically means that the lender will agree to a new loan that covers the debt incurred in the old loan and any additional fees.
Sometimes a short pay will often involve the help of a third party such as a relative or friend who steps in to act as a co signer or to help pay off the loan.
A borrower might also be able to file bankruptcy and modify their mortgage if the lender agrees to make changes in the original loan terms.
These changes can be temporary or they can be permanent, but are generally a temporary fix.
Lowered interest rates, changing the monthly payment so that less money is paid down on the principal, or extending the life of the loan could be ways that this option can work.
Many of these terms can be worked out in a Chapter 13 bankruptcy.
When filing Chapter 13 the lender will have to allow the debtor to catch up on back payments and sometimes agree to more favorable terms to help the borrower.
By filing for Chapter 7 or Chapter 13 bankruptcy, property repossession proceedings can be stopped until an agreement with the lender has been reached.
However, most financial counselors say that filing chapter 7 bankruptcy should come only as a last resort since a consumer's credit history can be irrevocably damaged.
If a borrower has the income to get back on their feet to the point of attaining a new loan, this loan can be used to pay off the old mortgage and get the fresh start needed.
For debtors that are suffering from a job loss or other financial disaster, the only option is to give up the property all together and walk away.
After checking all their options a borrower might see that there is just no way to retain ownership of the beloved home.
In this case there is no reason in spending more money to try to hang on to the property, walking away may be the best option.
There are many reasons why a property might be foreclosed on.
Any number of circumstances can cause individuals to see themselves face repossession.
If a homeowner becomes ill and is no longer able to work, this can result in a default on monthly mortgage payments.
An unexpected job loss can also lead to inability to make the mortgage payments.
Tragedies such as the loss of a family member might mean that surviving members of the family struggle to make ends meet.
One major mistake that homeowners who find themselves facing such a disaster might is that of failing to reach out for help.
Unfortunately, many individuals will hide an impending home repossession out of embarrassment or shame.
Of course, a foreclosure will not stay hidden forever, in time it will become a matter of public record.
Admitting the problem and reaching out for help and possibly even filing for bankruptcy can sometimes make the difference between losing a home and keeping it.
Many times homeowners wait too long to acknowledge a notice of foreclosure, doing this they may be forfeiting the chance to turn the situation around.
Even in the event of a notice of repossession, all is not lost.
There are steps that a homeowner can take.
Some lenders will allow borrowers to work out a deal beyond just the original lending terms that were established when the loan was signed.
These solutions could come in the form of the short pay or mortgage modification.
This basically means that the lender will agree to a new loan that covers the debt incurred in the old loan and any additional fees.
Sometimes a short pay will often involve the help of a third party such as a relative or friend who steps in to act as a co signer or to help pay off the loan.
A borrower might also be able to file bankruptcy and modify their mortgage if the lender agrees to make changes in the original loan terms.
These changes can be temporary or they can be permanent, but are generally a temporary fix.
Lowered interest rates, changing the monthly payment so that less money is paid down on the principal, or extending the life of the loan could be ways that this option can work.
Many of these terms can be worked out in a Chapter 13 bankruptcy.
When filing Chapter 13 the lender will have to allow the debtor to catch up on back payments and sometimes agree to more favorable terms to help the borrower.
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