Bankruptcy may be considered from many angles, but the popular belief is that by the procedure of filing for bankruptcy, you will have your financial obligations eliminated and once the process is complete your life will be back to normal and you can relax. This assumption can make most consumers to get lax about filing for bankruptcy and in their view it is adopted a way of life. Then again, a lot of people are much more hesitant to go down the bankruptcy road for fear of what other people will think of them.

The truth is that there are no guarantees that after you have filed for bankruptcy your situation will be totally debt free. There are umpteen types of debt such as student loans, alimony, unauthorized debts, major purchases of unnecessary items over five hundred and fifty dollars, and maintenance payments that you will be unable to remove with any ease, if at all. Do not suppose that by filing for bankruptcy these financial obligations will simply vanish.

In addition, still another decision you must make if you are to file for bankruptcy is whether you will file for Chapter 7 or Chapter 13 bankruptcy. The former choice is in all likelihood your best option if you hope for complete liquidation of your debts. However, it is not automatically possible to file for Chapter 7 bankruptcy unless federal bankruptcy laws show that you have the eligibility to file for this chapter of bankruptcy.

Yet another option you may want to consider is Chapter 13 bankruptcy. This differs from Chapter 7 bankruptcy in that it will help you with rearranging your debts rather than eliminating them. The benefit to this is that Chapter 13 bankruptcy helps ensure that your monthly payments are reduced, putting you in a much better position to repay your debts and regain financial stability.

It is usual when filing for bankruptcy under Chapter 13 that the process will take between three and five years to eliminate all of your debts entirely.

And still, there are quite a few steps involved with Chapter 13 bankruptcy before the process is complete. You will be permitted to keep certain assets and in point of fact these assets are protected under the laws that regulate Chapter 13 bankruptcy. However, similar to Chapter 7 bankruptcy, you must meet various requirements before you will be eligible to file for Chapter 13 bankruptcy.

Something thing to remember is that the choice of which chapter you file is not your choice, but is the court’s decision. This is a great reason that you may want to get the assistance of a bankruptcy lawyer who can show your financial position in a light that will allow you to file for the preferred chapter.

You need to remember that before you file for any kind of bankruptcy, it is best to consider every option that may be available to you. You might be a great candidate for debt consolidation which would lower your monthly outgoings and assist you to get back on track. Do not simply choose bankruptcy because it appears like the easiest answer to your position. Filing for bankruptcy is a drastic undertaking and should only be used as a last resort, and only after you have examined all other options.

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Ever since the housing crisis began almost a couple of years ago, homeowners have been looking for genuine solutions to avoid losing their homes. Getting a home loan modification has been one of the best options in order to lower your monthly payment and avoid foreclosure. Because of this, hundreds of thousands of families have been trying to get a loan modification for a long time. However, the number of foreclosures in the country has only been going up and unfortunately there are still millions of families who face the risk of losing their homes to foreclosure.

This situation is mainly because a number of companies have resorted to blatant cheating and scamming homeowners out of their hard earned money. Since loan modification is one of the few really solid options available, homeowners have been rushing to any advertised loan modification company or attorney making unbelievable promises and have been agreeing to exorbitant fees just to apply for a loan modification.

Sadly, these companies who charged the homeowners upfront fees which sometimes are as high as $7000 simply shut shop and run away never to be heard from again. Once the homeowner ends up paying anything upfront, they seldom hear from the loan modification company after that. At the most the company might be in touch for a week or so saying your application is being processed but in reality no application was made in the first place. Since the modification process takes about 90 days or more to work with lenders, most companies get discouraged trying to get something done so they give up. These companies give up because there is no longer a financial incentive to get a modification for their clients since they have already been paid their fee at the outset.

Taking advantage of the unfortunate situation the homeowners find themselves in, various companies or so called consultants, make false promises on being able to save the homes from foreclosure and often end up cheating their customers out of a lot of money. Instead of the number of scams decreasing, it is not only going up but newer scams have been reported by various homeowners who have been victimized by these scammers.

Many times a company will tell you that they would not charge you until your loan modification is approved. What they don’t mention is that the loan modification application is simply approved by their own staff and not the actual bank or mortgage lender. After a week or so of applying, these companies would get back to the homeowners saying the loan modification application was processed and approved by a team of qualified experts. Then they proceed to say the homeowner now needed to pay a fee upwards of $3000 to get the loan modification sanctioned from the bank.

In reality, until and unless your mortgage lender themselves approve the loan modification, no matter how many experts claim your application has been sanctioned, it does not mean your loan will be modified.

It is advisable that a homeowner should contact only those companies who specifically mention that there won’t be any upfront fees until your loan modification is approved by your lender. The keyword here is lender and anything else might be just a way to pull you in before charging a huge amount.

Although homeowners have to be careful of so many scams, they should not feel scared of a loan modification as it still remains one of the best solutions for avoiding foreclosure. All you have to do is make sure you find a company that does not charge any upfront fees until your mortgage loan modification is fully approved by your bank or lender.

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What is a Mortgage Loan Modification? 
A loan modification is when your servicer or lender re-negotiates the terms of your original mortgage loan. There are several ways in which they modify the loan:

• Lowering of interest rate 
• Fixing an adjustable rate to a lower fixed rate 
• Adding missed payments to the end of the loan 
• Extending the term of the loan- 30yr to 40yr term 
• Forgiving missed payments 
• Forgiving 2nd mortgages

Why Banks Modify Mortgage Loans? 
Lenders will modify a mortgage loan when a homeowner is facing a financial hardship and will have difficulty making payments. Many homeowners have no other financing options because they 1) do not have equity in the property, and 2) their credit has been so adversely affected that they are unable to qualify for a typical refinance.

It is to the lenders benefit to modify a delinquent mortgage loan because the foreclosure process is a very lengthy and very costly procedure. Experts estimate that a typical foreclosure cost approximately 40% to 60% of your mortgage loan balance. If the lender can offer a homeowner new affordable terms, they can recover the missed payments over time through interest payments.

Foreclosures are such a serious problem that the US Government has raised nearly a trillion dollars to assist lenders with loan modifications. Tax dollars are now being used to help the banks perform mortgage loan modifications at little or no cost to the homeowner. The banks only receive these funds if they agree to modify mortgage loans for struggling homeowners.

Loan Modification Companies- Beware of Scams 
I would like to take a moment to discuss the Loan Modification companies. You have probably seen the numerous commercials and heard the radio advertisements. In our opinion, the majority of these companies are overcharging for a service that is free, and many are downright fraudulent. They prey on the fears of struggling homeowners. They tell horror stories about apartment living… how your credit will be ruined… how your children will suffer not having a yard, or switching school districts. They will say anything to get your money. These Loan Modification companies hire ex-loan officers and call them “specialists”. These are the same people that misled you into signing the loan that you currently can no longer afford. Do not allow them to make a second commission on you!

Beware of the “Money Back Guarantee” 
They will further entice you with a “money back guarantee”. This guarantee is worthless. Many companies refund policies do not include a ‘processing fee’ that can be as high as $1000.

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For more information please visit: http://www.floridalawattorney.com