Have you ever been shocked to learn your house payment
is going up because your taxes and homeowners insurance have increased, and
your escrow account is now short? This happens all the time, and it requires a
homeowner to either pay the shortfall in a lump sum, or make increased house
payments. This can be frustrating, especially if your budget is already tight.
But maintaining current insurance and keeping your real estate taxes paid up to
date are vital components to home ownership. We know how hard you work for your
money, and that when it comes to paying down debt you can have a lot of
questions about what is best for you. For many, bankruptcy is the answer. But
first it is important to find out how your loans will be treated, and this
includes learning whether your mortgage company will still escrow for insurance
and taxes so you don’t have to set money aside to cover those expenses.
If you file bankruptcy your
lenders will be required to stop calling you to collect what is due, and cannot
sue you or take other action to collect the debt. This can make it hard to
communicate your needs with your lenders, and one very important need is for
your mortgage company to continue to maintain an escrow account for taxes and
insurance. There are few ways to handle this if you file bankruptcy:
•
If your current mortgage payment includes
an escrow payment, that amount should still be paid during your bankruptcy.
This will allow your lender to disburse funds to your insurance agent as well
as write a check to pay your property taxes.
•
If your current mortgage payment does not
include an escrow account, you can ask that one be established. The lender is
not obligated to do this for you, but many will consider doing so.
•
If you reaffirm the mortgage loan and it
included an escrow payment, the reaffirmed amount will also include a portion
of the payment be set aside for taxes and insurance.
Having an escrow account on your mortgage takes one
more thing off your plate, while ensuring all required cost for your home are
being met. Call our office for more information about bankruptcy and how your
house payment, including your escrow account, will be treated during your case.
For more information
about bankruptcy, contact us today at www.law-ri.com. We will help you come up with solutions that work for your family, and
have multiple locations where we schedule appointments so you can make a choice
that is convenient for you.
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