How To Know If Bankruptcy Is Right For You If Your Mortgage Modification Isn't Approved

Sometimes the best plans don’t work out like you thought, and you have to find an alternative resolution to a nagging problem. If you are in over your head with debt and have tried to get your mortgage holder to modify your loan to a lower payment, but the lender has refused, you need to start thinking about your options. One choice to save your finances is to file for bankruptcy. A bankruptcy will reduce or eliminate certain debts, and this makes it easier for you to pay the debts that remain. But how do you know if bankruptcy is the right choice for you?

If your attempt to modify your mortgage was denied by your lender, bankruptcy can really help. But before you decide to file a bankruptcy case you need to ask yourself a few questions. Here are some things to consider:

•         What are your financial goals? If you want to save money for emergencies, eliminate high interest rate debt, and save some of your collateral, bankruptcy is a good option. These are all things you can accomplish through a bankruptcy because when you eliminate or decrease your debt load you area able to save more. You are also able to make the payments on other debts, like your house and car, so you can hang on to the pieces of collateral that you need.

•         Are you facing a foreclosure? If so, a bankruptcy can save your home. In both chapters of consumer bankruptcy, a Chapter 7 and a Chapter 13, you get the chance to make payment arrangements on your mortgage.

•         Do you have any pending collection lawsuits or garnishments against you? If so, all of those must stop the instant you file a bankruptcy. This alleviates stress and also lets you keep more of your paycheck.

•         Have you filed a bankruptcy before? If so, there are certain guidelines that have to be followed about what type of case you can file now. If you file the wrong type of case, the Court will likely not allow you to proceed.

•         What type of case will suit you best? Would you prefer to file a Chapter 7 or a Chapter 13, and which one do you qualify for to file? This requires an examination o of your secured debts and income. The test is complex and will dictate which type of case you can file.

The decision to file for bankruptcy is a big one, but with the help of an experienced bankruptcy ad debt management attorney the decision becomes an easy one to make. For help with your money, call us to learn more.

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.