OPTION 3: File a Chapter 13 Bankruptcy
- Stop Foreclosure and keep your home
- Stop Car Repossession
- Eliminate certain tax debts to IRS
- Consolidates bills into one low monthly payment
- Certain other exceptions may apply
OPTION 4: Avoid Bankruptcy? Use Attorney Debt Negotiators
Are you looking to avoid Bankruptcy? Attorney negotiators can sometimes reduce and wipe away medical, utility and credit card debts. Through a series of negotiations, your attorney will try to persuade your creditor to reduce the balance on your account and accept the reduced balance payment as payment in full.
OPTION 5: Borrow From a Close Family Member or Friend:
For someone who is facing financial problem, perhaps the basic instinct is to turn to a trusted loved one for some assistance. Talking to a close relative or friend and explaining your problem to them might solve your problem. If it is possible to borrow some money in order to ward of the foreclosure of your home then you can come up with a realistic timeline for paying back their money. Be honest about your situation and about how long it would take to pay them back. They need to be sure that they are making the right decision by helping you.
OPTION 6: Talk to Your Lender About Possible Alternatives:
It might comes as quite a surprise to many that lenders will be willing to listen to why you are not able to make your contracted mortgage payments. The fact is that lenders make their money from your principle and interest payments. The foreclosure of your home is not something they would want either!
Before you contact your lender and explain your problem to them, be sure you have charted out an alternative plan which is both truthful and realistic. You need to communicate to your lender about how long it is going to take you to get back on your feet. You can either ask for your payments to be suspended for some time, while you tidy up your finances.
Another alternative is to make reduced payments for a few months till you are able to make your original payments again.
No matter what the alternative, it is essential that both parties clearly understand and agree to the new terms. Be sure that there is a written agreement and all the correspondence pertaining to this new agreement should be kept.
OPTION 7: Debt Consolidation
Debt consolidation is a program that consolidates all of your debt into one low monthly payment. On average, the program can reduce your monthly credit card payments by up to 80%, reduce or eliminate your interest rates and recoup your late fees.
OPTION 8: Selling the House
Another option to avoid foreclosure is to sell the house. Contacting a competent realtor would be the first step in putting your house on the market as soon as possible with a realistic price. In the event that you need the house to be sold immediately, it might be necessary to drop the price of the house to attract more buyers. Be sure that you check any complaints against the potential buyer of your house. This information can be found at your stateʼs Attorney General, the Real Estate Commission, or the local District Attorney's Consumer Fraud Unit.
OPTION 9: Refinancing Your Mortgage
Refinancing allows you to adjust your mortgage to better fit your current needs. When you refinance, you have the ability to start from scratch with a new mortgage. You can change your term, payoff existing debt or considerably lower your monthly obligations.
Home ownership comes with many rewards, being able to borrow money from the equity youʼve built up in your home is one of the greatest, however, Home Equity Loans are typically unavailable for credit scores under 620.
Frequently Asked Questions
Will I Be Able to Qualify For A Housing Loan Afterwards?
Debtors often qualify for housing loans within one year, however, they usually have to make a larger down payment and pay higher interest. Debtors are eligible for loans with more favorable terms, such as FHA loans, within two years of receiving a bankruptcy discharge.
Can I Keep My House, Car, and Other Personal Property?
In most cases, debtors can keep their homes, cars, and other personal property despite filing bankruptcy. Home lenders cannot foreclose on your house and car lenders cannot repossess your car merely because you filed bankruptcy. However, if you have fallen behind and are in arrears on your home loan, then the lenders can move the court to lift the automatic stay so that they can take back the property.
How Will Filing Bankruptcy Affect My Credit?
Bankruptcies appear on a person's credit report for 10 years. However, many credit card companies will offer debtors new cards right after they receive their bankruptcy discharge. Some credit card companies deem newly discharged debtors a good credit risk because they know that the debtors cannot file another Chapter 7 bankruptcy for at least 8 more years. In most cases, debtors can start rebuilding their credit right after they receive a discharge.
Can My Boss Fire Me If I Declare Bankruptcy?
No. Title 11 of the United States Code Section 525 prohibits a private employer from discriminating against an employee for filing bankruptcy.
Will My Creditors Stop Harassing Me?
Creditors are required by law to cease all collection efforts once the debtor has filed bankruptcy. They are prohibited from engaging in collection activity by the Automatic Stay in the Bankruptcy Code. Creditors who violate the automatic stay may face serious consequences. Exceptions to the automatic stay apply in certain situations. Some of these situations arise when debtors have had a prior bankruptcy dismissed within a year of filing the current bankruptcy, when debtors have not complied with requirements concerning debts secured by personal property, when debtors' landlords have received a pre-petition judgment for possession against them, and when debtors have domestic support obligations.
Will I Be Able to Keep My Credit Cards?
The credit card company decides whether or not a debtor with a zero balance can keep the credit card. However, debtors who have outstanding balances on their credit cards must list those cards in the bankruptcy and will lose the cards unless they can work out an agreement with the credit card company and reaffirm the debt.
Which Debts Are Not Eliminated in Bankruptcy?
The following debts are generally not dischargeable in bankruptcy:
- Student loans unless there is good cause
- Income taxes less than 3 years old
- Older income taxes that were filed less than 2 years ago
- Debts for cash advances or loans for more than $750 incurred on or within 70 days of filing
- Debts for credit purchases of more than $500 for luxury goods or services incurred on or within 90 days of filing
- Debts incurred on the basis of fraud, embezzlement, or larceny
- Debts incurred by inflicting willful or malicious injury on another person or person's property
- Debts for personal injury or death caused by drunk driving
- Fines and penalties imposed for violating the law, such as traffic tickets and criminal restitution
- Domestic support obligations
We are a debt relief agency. We help people file for relief under the US Bankruptcy Code.
If you are contemplating either a business or personal bankruptcy, call TALC and speak with an attorney NOW. TALC serves clients in the Philadelphia area, including Drexel Hill, Chester, Springfield, Bucks County, Montgomery County, Delaware County, Chester County, Philadelphia County, and surrounding areas.
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