Bankruptcy Personal

Loan modification is a way out for struggling homeowners to avoid the risk of a foreclosure. If you have fallen back on your monthly mortgage payments, you can easily go in for a loan modification. If, ‘how to do a loan modification‘, is the question that keeps you wondering, you can seek the help of mortgage lenders. Mortgage lenders are known to be very stringent when it comes to accepting a loan modification request. But did you have any idea that the lenders benefit from a loan modification, just as much as you do? Most lenders will accept your loan modification request as they tend to avoid going through the rigorous process of foreclosure. Have a look at the reasons why your lenders prefer a loan modification than a foreclosure.

1. The process involves lesser amount of money and time: The process involved in approving a loan modification is much cheaper and takes less time. If a borrower goes through foreclosure, he can get the opportunity to become current on his mortgage payments. Usually, lenders take a span of 30-60 days to approve the request of a loan modification as this involves the scrutinizing of your documents and arbitrating with your loan modification attorney to determine whether or not you are eligible for it. This entire process takes less time than going through a foreclosure.

2. It involves lesser work: To start the foreclosure process, your lender will have to go through a lot of formalities like assessing late charges, filing a notice of default, paying your lawyer fees and arranging auction to sell your home. If you can manage to get back on track and stop the process of foreclosure, all the hard work will go in vain. On the other hand, the process of loan modification does not need so much of hard work on the part of the lenders. The majority of the work is already done by you and your loan modification attorney as you will have already completed your documentation. The lenders are only left with the work of assessing your case and deciding the kind of mortgage assistance you may need.

3. Lenders can retain investors: Foreclosures have a terrible result on the lenders. It may benefit them for a particular time, but with the recent real estate market conditions, it will eventually prove to be harmful for them. No investor will want to work with a bank that has too many foreclosure records. Instead, if they grant you a loan modification, your payments will be shown as coming in on their records.

However, all these won’t help you make the process of loan modification any easier. Go to your mortgage lender, if you want to know ‘how to do a loan modification’. Try and show that you will be able to make regular mortgage payments after the terms are modified. Shop around to secure the best loan modification offer.

Author: Jim Allen

Are you buried in so much debt that you are considering filing for bankruptcy? Just saying the word bankruptcy seems like you have just announced your own death sentence to the entire world. Filing for bankruptcy protection is not the end of the world, it can in fact help you eliminate debt now and gain monetary stability for the future.

Do you really know what it means to file for bankruptcy? If you announce bankruptcy, it basically means that you have a lot of debt and you have no way to pay back these debts. When you file for bankruptcy protection and get it approved by the court system, it means that you will end up with less debt or no debt at all. Bankruptcy has its own benefits for those drowning in debt, but it also comes with a big drawback. You can expect to have really bad credit history on your credit report for the next 7-10 years when you filed for bankruptcy protection. Even though you can rebuild your credit history between this 7-10 years, your bankruptcy filing will stay on the credit report for at least this amount of time. So even if you can rebuild your credit score to 800, your credit report will still indicate your bankruptcy filing.

What is the difference between bankruptcy and debt consolidation? The big difference between bankruptcy and debt consolidation is the amount of debt you owe and if you can or cannot pay it off. Bankruptcy gives you the chance to get rid of the debt that you have over the years. If you can take several years and pay off your debt, then you should look into debt consolidation and not declare bankruptcy.

In the case of debt consolidation, this is always a 3rd party debt consolidator involved. Most of the debt consolidator will require you to divulge all the debt that you have and forge a way for you to pay down the debt over time. The debt consolidator generally ask you to pay him/her a set amount per month. This debt consolidator will then distribute the monthly payment to the various debtors that you owe, effectively giving you a clear picture of your financial health. Even though debt consolidation sounds like a doable alternative, we will proceed with our discussion on the bankruptcy as you have so much debt that it is next to impossible to pay them off.

Bankruptcy is not a privilege, it does not mean that you can just declare bankruptcy if you want. Declaring bankruptcy’s first step is to file your petition with the state. The bankruptcy petition informs the court system that you are preparing to declare bankruptcy. To file the bankruptcy, you should look to hire a bankruptcy lawyer to help you with all the paperwork. The bankruptcy lawyer will help you file the petition using all the right documents. After you have secured a bankruptcy lawyer, you will need to attend credit counseling class which comprises of a pre-bankruptcy and post bankruptcy class. You will also be assigned to a trustee who will preside over your bankruptcy hearing. If everything goes right, about 45 days after the bankruptcy hearing with the trustee, you should be given the bankruptcy discharge papers. Once you have been given the bankruptcy discharge papers, that means that you are no longer in debt with all the creditors and you can start with a clean slate financially.

The significance of the bankruptcy discharge papers is that it confirms the elimination of all the debt you have stated in the bankruptcy filing documents. Now that you have become debt free, be prudent about what you are spending and do not ever fall into debt like you did previously. Do not ever incur so much debt, live within your means, only spend what you have and try to save some money for the rainy days. Never take your past bankruptcy lightly. Learn from your mistakes and do not ever accumulate too much debt. You should learn from your mistakes in the past and be smart about your financial wellness. Do not forget the old saying “fool me once, shame on you; fool me twice, shame on me”. Learn from your past mistakes and embark on a life without debt and strong financial well-being.

When you file for bankruptcy, you have certain exemptions. What this essentially means is that the legal system allows a certain amount of your assets to remain untouched, thereby giving you the ability to start over again without getting caught in the debt trap. When a bankruptcy exemption says “home exempted up to X dollars” it means that if your home is exempt up to $25,000, then anything above that value, you will have to sell to clear your debt.

If for example your state homestead exemption is $20,000 and your home equity is $100,000, you would then be forced to file for bankruptcy under Chapter 13 or you would have to sell your home. In the sale, you will be able to keep $15,000 and the rest will go towards clearing your debt. There are some states that allow you to federal exemption. There are

1 Arkansas
2 Connecticut
3 Washington D.C.
4 Hawaii
5 Massachusetts
6 Michigan
7 Minnesota
8 New Hampshire
9 New Jersey
10 New Mexico
11 Pennsylvania
12 Rhode Island
13 Texas
14 Vermont
15 Washington
16 Wisconsin

The states that can be considered as having the best bankruptcy exemption systems are Texas, Florida, South Dakota, Iowa, Oklahoma, and Arkansas. Married couples filing for bankruptcy can double their exemptions. The value of the exemptions is changed every three years on April 1st to match current Consumer Price Index.

There are some federal non-bankruptcy exemptions as well and these can be filed under only your own state’s exemptions. They cover pensions of the likes of Civil service employees, Foreign Service employees, Military Medal of Honor, Military service employees and Railroad workers. They also include a range of public benefits like death and disability benefits of government employees. The same with longshoremen and harbor workers, social security, veteran’s benefits and so on.

There are also exemptions on homestead sales or lease proceeds in the case of Indian lands. Klamath Indian tribe benefits for those in Oregon State, military deposits if you are stationed permanently out of the country, seaman’s clothing and insurance as well as railroad workers unemployment insurance.

These exemptions are in some cases only and it should be taken for granted that you will automatically be eligible for them. In most cases you may not be.