How Is Bankruptcy Different From Debt Consolidation?

Fixing financial problems takes on many different shapes and sizes. And, there is no “one size fits all” solution to money mishaps. The key is to find what works best for you, your family, and your budget. Once you do, you are well on your way to financial freedom and the decrease in anxiety that comes with knowing you can pay all of your bills without worry. When considering what you can do to fix your finances it is important to know how remedies are different from each other, so you can pick the one that makes the most sense to you. One area where people often get confused is in differentiating between bankruptcy and debt consolidation. While the two do share some common ground, there are also important differences to consider.

Bankruptcy differs from debt consolidation in that:

  • Bankruptcy is a legal remedy, approved by the Courts and available to anyone. It is true that there are restrictions on what type of case you can file, and even more restrictions on filing if you have filed a case before; but for the most part bankruptcy is a remedy that anyone can use. The benefits are that once you file a case your lenders are not allowed to call or collect from you, most of your debt is either eliminated or reduced, and in some instances you get to pay the value of a piece of collateral instead of the loan balance.
  • Debt consolidation is still debt, and it requires you to qualify for a consolidation loan. If you default, the lender can sue you, and the impact on your credit is close to the same as the notation made when you file for bankruptcy. There is a form of debt consolidation through bankruptcy, in the form of a Chapter 13 case, but this should only be done after talking over the specifics with a knowledgeable bankruptcy attorney.

In the end, bankruptcy turns out to be the better option for most debtors. The protection offered by the automatic stay, which is the part of a bankruptcy case referred to above that prevents creditors from engaging in collection activity, is only available by filing a case. This reprieve from contact by creditors is just what most people need, and it allows them to take a deep breath and clear their heads. When you proceed free from worry or doubt, you are more likely to reach your financial goals.

For more information about bankruptcy, call us today or reach us online at www.law-ri.com. We have multiple locations to serve you and can schedule a time to meet at the office most convenient for you.

The Top Three Debts That Bankruptcy Eliminates

The average debt load in America is on the rise every day. People are having to resort to credit cards or loans to pay for every day expenses, and when those debts cannot be repaid they can grow to enormous amounts. This cycle is unbearable and it makes it hard to identify which debts are for necessities and which are simply out of control. It is acceptable to carry some debt, but the debts that bog you down need to be eliminated so you can focus on what matters most. To do this you can file for bankruptcy, and eliminate certain debts that provide no benefit to you.

Debts that provide a benefit are debts for cars and houses, because we all need to be able to get to work and have a place to live. But the debts that have accumulated with nothing tangible to show for are the types of debts that should be wiped out or decreased by filing bankruptcy. The top three debts like this that bankruptcy eliminates are:

 

  • Credit card debts: most credit cards have high interest rates, which makes the balance go up instead of down with each payment. Usually the things bought on credit cards are not things you use every day or even still have in your possession. Getting rid of this debt allows you to pay for other needs like groceries and utilities.
  • Medical bills: medical bills can grow to quite high figures, especially if you lack insurance. Most medical care providers will work with you on repayment, but that may not always be the case. Because medical debts are unsecured debts, they are often eliminated by filing bankruptcy.
  • Signature loans: talk about exorbitant interest rates! These loans carry some of the highest rates around and the lenders are notorious for refusing to work with borrowers when payments cannot be made. Filing bankruptcy gets these creditors off your back, and puts an end to the harassment from collectors working for payday and signature loan lenders.

Depending on your needs you can also eliminate auto and home loans by filing bankruptcy, but doing so means you also give up your house or car. The decisions necessary for an effective bankruptcy case are hard to make, but with our help become clear.

For more information about how bankruptcy works, call us today or reach us online at www.law-ri.com. We have multiple locations to serve you and can schedule a time to meet at the office most convenient for you.

 

 

Five Bankruptcy Tips

If you have more bills than income, it is time to take action. One of the most effective ways to cut out burdensome debt is to file for bankruptcy. But filing a case is a serious step, and should only be taken after careful consideration. When making this decision it is critical to examine every aspect of your finances, and know what you are getting into before filing a case. If you take the time to do your homework and learn what to expect, your chances at having a successful case are much higher.

Here are five bankruptcy tips that will help you decide if filing is right for you, and if so what you can expect once you do file a case.

  • Be prepared to live on a budget during, and after your case ends. The only way to get out of debt and stay there is to set realistic goals about your monthly expenses. Coming up with a budget can be hard, but once you have a list in place of what you owe each month it is easier to pinpoint areas you can eliminate or reduce.
  • Avoid taking out new debt once your case is over. The point of filing bankruptcy is to get rid of debt, if you incur new debt after the fact you will have taken one step forward and two steps back.
  • Be realistic about what you can afford to keep and what you may have to give back. You are allowed to keep things like your house and car when you file bankruptcy, but you do still have to pay. If making high car payments contributed to your financial downfall, it might be wise to give back the car and opt for something less expensive.
  • Do not take out new credit card debt, even though it will be offered to you after your case is over. The interest rate on credit cards is high, and can be even higher for those who have gone through bankruptcy. The exception to this rule is if you are able to pay off your cards in full each month.
  • Establish a savings account, so you can pay for emergencies with cash instead of credit.

For more information about bankruptcy, call us today or reach us online at www.law-ri.com. We have multiple locations to serve you and can schedule a time to meet at the office most convenient for you.We understand the hesitation some people have to filing bankruptcy, but assure you the end result is worth the work it takes to file a case. When money is tight and you struggle each month to pay for all of your needs, the only answer is to eliminate or reduce expenses. Bankruptcy will help you accomplish this goal.

Why Do I Have To File Chapter 13 Instead Of Chapter 7 Bankruptcy?

Bankruptcy is a popular way to eliminate debt, but in recent years the rules changed and many debtors are finding they have to file a case that does not wipe out everything they owe. This is because most debtors are being required to file a Chapter 13 case instead of a Chapter 7 case. The difference is that in a Chapter 7 all unsecured debt is cleared, but in a Chapter 13 case the debtor has to pay back at least a part of their unsecured obligations. This means your credit card debt is not totally wiped out by filing a Chapter 13, and sometimes that does not sit well with those who are seeking the protection offered by filing bankruptcy.

In order to understand why a person would have to file a Chapter 13 instead of a Chapter 7, it is important to know the following basics about each type of bankruptcy:

  • Chapter 7: this form of relief is reserved for those who do not have enough disposable income to devote to repayment of any portion of their unsecured debt. This determination is made by performing a complex calculation before a case is filed, and is best done by a knowledgeable bankruptcy attorney. In a Chapter 7 case all of the unsecured debt owed by the filer is discharged, meaning it is no longer due.
  • Chapter 13: this type of bankruptcy case is required for those debtors that do have some money left over each month after paying all of their secured debts, to put towards any type of payment to unsecured debt load. The same calculation is required, and the result will dictate which chapter of bankruptcy is filed. Even though repaying credit cards is not ideal when filing bankruptcy, the upside here is that the entire amount is not due and there are other areas where you can save. For instance, if you want to keep your car in bankruptcy you can pay only the value of the vehicle in Chapter13 but have to pay the full amount back in most Chapter 7 cases.

 

We have experience looking at personal finances and helping people understand what type of case they are allowed to file. We also explain the differences and what to expect in either type of bankruptcy case, so you are prepared for what lies ahead. To get out of debt today, call us for help.

 

For more information about bankruptcy, call us today or reach us online at www.law-ri.com. We offer appointments at multiple locations for your convenience and can schedule a time to visit with you soon.

 

 

Can A Judge Stop A Foreclosure So I Can Modify My House Payment?

A foreclosure is the bank’s legal remedy to take possession of your home when payments are not made. For many people who find themselves in the middle of a foreclosure, finding a way out seems impossible. Fortunately, there are options and one of them is bound to fit the facts of your case and meet your needs. Sometimes all it takes is a quick call to the lender to negotiate alternative repayment terms, and other times legal recourse must be taken.

If you have tried to reason with your mortgage holder about delinquent house payments, but the lender insists on pursuing a foreclosure, you can ask for a modification of your loan. A modification helps in these ways, especially during a foreclosure:

 

  • Lenders are prohibited from pursuing foreclosure while an application for modification is pending. The concept is referred to as “dual tracking” and the law does not allow a bank to engage in this practice. The idea is that if the borrower is trying to work out repayment with the lender, a foreclosure will become unnecessary. Accordingly, until a modification decision is made, a foreclosure should not move forward.
  • When you ask for a mortgage modification the lender will be required to advise the current amount due on your loan. If this amount differs in any way from what has been asked for in a foreclosure, you have the right to fight the foreclosure as wrongful due to an incorrect amount being pursued.
  • A Court will not allow a lender to stall or give you the brush off regarding your request to modify when a foreclosure is pending. Many lenders ignore the application or provide short denials without reason, bringing this to the attention of the Court during a foreclosure typically forces the lender to do their due diligence and give your request the attention it deserves.

Your best approach in situations that include a foreclosure and a request for modification is to partner with a qualified attorney. While you are permitted to represent yourself, the Judge will expect you to be well versed in the law and the specific procedures of the Courtroom. Adhering to these rules is best done by a trained legal professional, who can also hold your lender’s feet to the fire regarding your modification application. In this way, you get the benefit of legal counsel and a skilled negotiator.

For more information about a mortgage modification and how your property taxes are impacted, call us today or reach us online at www.law-ri.com. We offer appointments at multiple locations for your convenience and can schedule a time to visit with you today.

Will I Have a To Go To Court To Lower My House Payment?

Getting a lower house payment is a great way to cut monthly expenses, but getting there requires a little bit of work. The most popular way to get a lower house payment is to ask your mortgage lender to change the terms of your existing mortgage by doing a mortgage modification. The change in terms will include assigning a lower interest rate to your note, and might also include changing the number of years the loan is in repayment. A lower rate and extending the time you take to pay back your mortgage (say from 15 years to 30) will result in lower payments, saving you money each month. This sounds good to a lot of people, but the process can be intimidating. Rather than shy away from asking for a modification because you are uncertain about how it works, let us sit down with you and give an explanation.

Each case is different, so there will be factors in your case that do not exist in others, but generally speaking a modification goes like this:

  • The homeowner becomes delinquent on their house payment, and asks the lender to modify the mortgage. The request is made by way of filling out an application and providing certain documents to the lender.
  • The lender reviews the application and documents submitted, and then makes a decision on whether to offer a modification.
  • The offer may include a change in interest rate or term, and might also include a requirement to participate in a trial modification before making a final decision.

 

All of this happens outside of the Courthouse, so you will not be required to go before a Judge and ask for his or her blessing on the modification. However, if legal questions arise regarding the modification, those could require litigation and if so a case will be filed on your behalf. The prospect of appearing in Court is off putting to most, but when we take on your case we act as your representative both inside and outside of the Courtroom. We focus on all types of financial relief matters and can help you whether a case needs to be filed, or you just need assistance negotiating with your creditors.

For more information about debt and mortgage modifications, call us today or reach us online at www.law-ri.com. We offer appointments at multiple locations for your convenience and can schedule a time to visit with you today.

How Many Months Behind Do I Have To Be To Modify My Mortgage?

Falling behind on your house payment is stressful, and can lead to a buildup of late fees and extra interest. Over a short period of time the past due amount can balloon into much more than just a few missed payments, making it near impossible to ever get current. If this is you, you need to know there are ways out of this seemingly black hole. One of the best ways to get back to a current status with your house payment is to have the mortgage loan modified. Not only will a modification lower the rate and give you a smaller payment, but it is also possible to wrap all of the past due amount into the new loan so you can start fresh.

In order to get a modification there are certain steps the homeowner has to take, and one of those is to complete an application for modification. You may do this at even one month behind on payments, or as many as several months past due. The decision on when to seek a modification is a personal one, but the sooner you act the more benefit you will get by:

 

  • Taking early charge of the problem, and letting your lender know you are serious about finding a remedy. Those that are willing to work with their mortgage holder by refusing to ignore the problem and taking fast action give off the appearance of being responsible enough to handle a modification. It is also helpful to your stress level to get a hold of the issue early on, rather than let it fester and cause unnecessary sleepless nights or problems with personal and professional relationships.
  • Receiving an answer, and having the reassurance that goes along with knowing help is available. Most of us like to know what to expect, especially when it comes to dealing with overwhelming situations like having too much debt. When you take fast action to modify your mortgage early on in the default stage, you will get an answer faster and have the security of a solution.
  • The faster you start saving with a modified mortgage, the sooner you can start to establish a savings or emergency fund. This can come in handy if you have an unexpected expense like unforeseen medical bills, or car repairs. Having money on hand sooner helps you to avoid the need to use credit and incur more debt.

While there is no hard and fast rule as to how many months behind you have to be to ask for a mortgage modification, the benefits outlined above make it clear that as soon as you realize you are not able to get back to a current status, the better it is to act.

For more information about managing your mortgage payment or asking for a modification, call us today or reach us online at www.law-ri.com. We will help by looking at the facts of your case and giving you options to reach your financial goals.

How To Know If Mortgage Modification Will Work For You

When life throws curveballs not every option will work for every person. Because every situation is unique it is essential to find a solution to your problems that is tailor made for you. When the problem relates to finances this is all the more true, because shoring up a bad financial condition is usually on the top of most people’s priority lists. But how do you know if bankruptcy is the answer to your money trouble? Or what is a good way to determine if consolidating debt is better than modifying your house payment? The best way to get answers to these important questions is to talk it over with a knowledgeable professional. Our legal team has experience reviewing finances and coming up with fixes that work.

When trying to decide if a mortgage loan modification will work for you, ask yourself these questions and give honest answers. When you do, you will have much clearer picture of what you need and how to get there:

  • Are you facing foreclosure? If so, a mortgage modification can stop that process, and give you the time you need to find a solution to save your home. Banks are prohibited from engaging in what is called “dual tracking”, which is the pursuit of a foreclosure while a mortgage modification is pending.
  • How high is your current interest rate? If you are paying a rate that is pretty much in line with what is currently being offered to new homeowners, you may not benefit much from a modification. But if your interest rate is sky high, chances are good you will see a significant drop in your house payment by modifying your mortgage.
  • Are you willing to accept a trial modification? Some programs require the borrower to successfully complete a trial period before offering a final modification. If you are unwilling to try the plan out, you might need to search for other answers to your financial problems. But, if you are agreeable to trying to pay the modified terms before being offered a final change to your mortgage, a modification could work for you.

Each borrower faces different obstacles and has different needs. That is why we provide customized assistance, and work with you to find a solution you like. Don’t let tough finances get the best of you, let us help.

You can reach us online at www.law-ri.com. We will help by coming up with solutions that work for you and have multiple locations for more convenient one on one office visits.

Three Mortgage Modification Mistakes To Avoid

If you are having a hard time paying all of your bills, the time is right to find an answer that will free up some of your money each month and give you some much needed breathing room. One way to get a handle on debt is to file for bankruptcy, another is to consolidate debt into one loan so your overall payment is less than the sum of many small payments added together, and a third option is to modify your mortgage loan. A mortgage modification is a change to the current terms of your mortgage, and the result is a lower payment. You get a lower payment by having the interest rate reduced, but you do have to be careful to avoid a misstep when undertaking this endeavor.

Lenders can be difficult to work with when you are behind on your payments, and asking for a mortgage modification is no exception. In order to get the most out of the procedure and make it work for you, here are three mortgage modification mistakes to avoid:

  • Failing to keep written record of all communication with the bank: if you do not keep copies of what you have sent to the bank, and what you have received in reply, it will be hard to show the terms of an agreement. To avoid having to go back and submit documents multiple times, keep a copy of what you provide to your lender and also keep a copy of anything the lender sends to you. A good place to start in this regard is with the application. Before sending off an application for modification, be sure you have a copy of it in exactly the same form as you have sent it to the lender. This means making sure all attachments are also kept with your copy of the application, so you can refer to all documents provided with ease.
  • Failing to track delivery of documents: many homeowners have stories of how they have been asked to send documents more than one time to their lender. The savvy homeowner will send all correspondence by certified or overnight mail, with proof of delivery made available. This is the only way to counter-argue with your lender when they make duplicate document requests.
  • Trying to obtain a modification without professional help: it might seem like a good idea to try and save money when asking for a modification, by filling out the application and conducting all the follow up on your own. But those that do soon realize the cost for assistance of a legal professional is quickly offset by the expediency with which the case moves, and the hassle of dealing with the lender is taken off their shoulders.

 

For help with a mortgage modification request, allow an experienced debt management attorney to take on our case for you. We have helped others fix their finances, and look forward to helping you too.

For more information about mortgage modifications, contact us at www.law-ri.com. We will help by coming up with solutions that work for you and have multiple locations to meet your needs for office visits.

 

 

The Two Best Ways To Get Ahead By Modifying Your Mortgage

Mortgage modifications alter monthly house payments, in a way that makes it easier for the borrower to maintain current payments. This is accomplished by lowering the interest rate, which in turn results in a lower house payment. If you are struggling to make ends meet, saving money on your house payment by modifying your mortgage is a good solution. Mortgage modifications can also save you money in other ways, making this a very viable option for many distressed homeowners.

The two best ways to get ahead by modifying your mortgage are to:

 

  • Save the money you save in interest, so you have an emergency fund to fall back on when an unexpected expense arises. When your house payment goes down, you have more disposable income to draw from and putting those funds aside in an emergency only account each month will give you the reserve you need in times of trouble.
  • Modify not only the interest rate on your mortgage loan, but also the repayment term. If you are able to switch from a 30 year note to a 15 year loan you will shave 15 years of payment off your budget. This means your house is paid off earlier, and that you build equity in your home at a faster rate.

Additional benefits to modifying your existing mortgage include being able to put past due payments at the end of the note, by essentially wrapping those into the newly modified mortgage loan. You may also be able to have late fees waived, or at least added to the new mortgage so you do not have to come up with a lump sum payment of late fees right off the bat. The process requires you to fill out an application with your current lender, and you will likely be asked to provide proof of income and the circumstances that make up your current financial hardship. We can help with this complicated process, and will stand by you at every step along the way to ensure the paperwork is processed properly. Let us help you take control of your finances today, by sitting down to talk about what to expect when you ask for a modification of your mortgage loan.

For more information about mortgage modifications, contact us at www.law-ri.com. We will help by coming up with solutions that work for you and have multiple locations to meet your needs for office visits.