Home Loan Modifications
With the recent downturn in the economy, many people are at risk of losing their home to foreclosure. With the vast number of people who are looking for debt relief, many businesses have sprung into action to offer credit counseling services, short-sales, debt consolidation and other non-bankruptcy alternatives.
While many of these bankruptcy alternatives may seem appealing, they may or may not offer a meaningful solution to your debt problems. At Sno-Isle Bankruptcy, we often represent clients who have come to us in a state of despair because a home loan modification has not provided the relief they need. This is what we have found:
- We speak to a number of people who could not get a loan modification.
- Some of our clients must file for bankruptcy before they can even become eligible for a loan modification. They have so much debt that they must first discharge a portion of their debts before a home mortgage lender will offer them a loan modification.
- Many people are not aware of the concept of lien stripping, where a second or third home loan may be turned into an unsecured debt if the value of the home is less than the first mortgage.
- Loan modifications can be time consuming and very frustrating. Some of our clients tell us they are asked to send in the same information again and again.
- Short-sales can be even more time consuming and are by no means guaranteed to work.
How Can Bankruptcy Help?
If you are at risk of losing your home to foreclosure, bankruptcy may provide the answer you have been seeking. If you have a regular source of income, you may be eligible for a Chapter 13 bankruptcy. Even if your mortgage lender has started the foreclosure process, we may be able to help.
A Chapter 13 bankruptcy can provide tremendous relief:
- When you file for bankruptcy, an automatic stay goes into effect that may help you put a temporary halt to foreclosure proceedings while your bankruptcy application moves forward.
- If you are several months behind on your mortgage payment, you may be able to pay back your mortgage arrears gradually over time.
- As mentioned above, you may be able to strip a second or third home mortgage if the value of your home is less than the value of your first home mortgage.
In certain circumstances, a Chapter 7 bankruptcy may also provide necessary relief. If your wages are being garnished, for example, a bankruptcy may allow you to stop the wage garnishment, freeing up enough money to make your monthly home mortgage payment.
Contact a Washington Bankruptcy Lawyer
If you have questions about bankruptcy, home foreclosure and other debt related matters, contact Sno-Isle Bankruptcy in Everett, Washington. Our managing attorney, Stephen Garvey, has more than 25 years of legal experience and practices exclusively in bankruptcy law.
To schedule your free consultation, call 425-265-9400 or contact us by e-mail.
