If you where able to stall your foreclosure for an extra six to twelve or even eighteen months would that extra time allow you to get your finances back to a place where you could afford and more importantly qualify for a mortgage loan modification program.

Some families who have through no fault of their own lost their main source of income due to the economic downturn have unfortunately fallen into the foreclosure trap. Their only crime is that their jobs where victims of bad management. Now with no source of income they have fallen behind on their home loan and are facing foreclosure and the loss of the family home.

Some of theses people have top class qualifications and excellent prospects of large incomes when the economy eventually rebounds. So it appears that perhaps all some people need is a strategy that would hold off the foreclosing lender until they find a new good paying job.

There are numerous things that can be done to slow down the foreclosure process from declaring bankruptcy to filing a case at your local courthouse asking the judge for a injunction order against the bank and its attorney thereby stopping the auction.

The only thing that is guaranteed is that if you do nothing your home will be auctioned and you will lose it.

Never ever ignore any correspondence you receive from your lender or their attorney by mail. Never ever ignore any correspondence you receive from any US Court. Remember that without and order from a judge no one can proceed against you. Even is states where the foreclosure system is non judicial the foreclosure must be recorded with the court.

Merely committing to fight the bank and its attorneys will guarantee you at least an extra three months. Perhaps in three months you might have found a great job and will be in a position to easily afford your current payments.

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Millions of consumers are finding it hard to pay their mortgage in these tough economic times. Perhaps you or someone you know is in such a predicament and sliding towards foreclosure. Before the situation becomes even worse, here are some suggestions to attempt to dodge foreclosure:

1. Whether or not you want to keep the home…
A. Learn what the foreclosure laws are in your state. Like the set timer on your stove counting down, your state gives your lender a specific amount of time before your legal right to your property is done. You need to know how long you have to redeem or sell your property so the full foreclosure does not occur. Contact your local Recorder/Register of Deeds or the Sheriff’s Department, who in most states holds the foreclosure auction, and they will be able to give you correct information regarding the time you have left to do something with your property.

B. Thoroughly investigate any person or company who contacts you about “rescuing” you out of foreclosure. Multiple foreclosure “scams” are being reported from coast to coast so contact your state attorney general’s office, the Better Business Bureau, or your lender before giving them any information or signing any documents. The last thing you need is to be swindled when you’re already in a bad situation.

2. If you want to keep your home…
A. Pursue “forbearance” with your lender. Perhaps you are behind on your mortgage due to a temporary reduction in income, and you fully expect to get back on your feet. Your lender can reduce or suspend your mortgage payments for a period of time, and/or they can arrange to take the amount you are behind and put it on the end of your mortgage when you pay off the loan. If and when a “forbearance” is done, make sure your lender puts it in writing, and keep the letter with your other important documents.

B. Attempt a “loan modification” with your mortgage lender. A loan modification is when the lender agrees to temporarily lower your interest rate for a set period of time to ease your financial burden. Recent government action and your lender’s motivation to have one less foreclosure make this a great option. Contact your lender directly to pursue this alternative and make sure they give you the details in writing regarding your “loan modification.” If they become difficult to work with, carefully consider a loan modification company only after investigating their references and fees. Search the internet for blogs and discussions about them. Call your state attorney general’s office to see if any complaints have been filed against them.

C. If your lender refuses to cooperate, file Chapter 13 Bankruptcy to protect your home from being foreclosed. In Chapter 13 Bankruptcy, you will have an opportunity to catch up on your mortgage through your repayment plan to the U.S. Bankruptcy Trustee.

3. If you don’t want to keep the property…
A. Sell the property for at least what you owe. Sorry to be so obvious, but sometimes with a foreclosure crisis it’s easy to forget you typically have 6 months to sell the property on your own. You may have to sell it yourself or go through a discount real estate broker. I realize the present housing market is very difficult, but homes are still selling. A difficult sale is always better than an easy foreclosure!

B. Negotiate a “short sale” with your lender. A “short sale” is when you and your lender agree on a sales price to sell your home for less than what is owed. In most cases in the current market, this is due to falling home values. Be sure to contact your lender about a “short sale” before you put your home up for sale. They may require an appraisal to determine fair market value. If you do sell your home by “short sale”, make sure you contact your tax accountant. The 2007 Mortgage Forgiveness Debt Relief Act changed tax laws so sellers who do short sales on their primary residence do not have to declare the shortage as income as long as it is less than $2 million. To be safe ask your accountant how it applies to your specific situation and short sale.

When it comes to escaping foreclosure, there are no easy solutions. You just have to do everything you possibly can to dodge it.

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One of the difficult parts of navigating a bankruptcy filing is learning all of the various legal and financial terms used by your lawyer and the court. If you end up filing bankruptcy, you’ll experience something known as the 341 meeting.

If you’re wondering where the name comes from, it comes from the section of the bankruptcy code that deals with the subject. (That’s the same reason that the various types of bankruptcies are known as Chapter 7, chapter 13, and so on.)

At this meeting, you and your attorney will discuss your case with the trustee. This person (also known as the case trustee or panel trustee) is responsible for selling any nonexempt assets and distributing the funds to your creditors during a Chapter 7 bankruptcy proceeding.

The good news is that in the vast majority of cases, you will not have to liquidate your assets during Chapter 7. This is either because you don’t have any assets worth mentioning (hooray!) or because your assets are exempt.

You will have to answer some questions, with your lawyer’s assistance, regarding your assets. Again, in a Chapter 7 filing, the trustee is mainly concerned with trying to liquidate any assets that can help pay off your debts. You should be aware that this can include funds that you receive within six months of filing bankruptcy like life insurance, or inheritances. You may also have to give up some tax refunds from the current year or past years, but the creditors can’t take any future tax refunds.

You may be surprised to learn that in most cases your creditors will not show up at the meeting. There are some exceptions, so you may see some of your beloved creditors join in the interrogation process, but chances are they’re too busy harassing other clients.

Okay, the last comment was a bit harsh, I know. In most cases people who end up filing bankruptcy do so as a result of poor financial management (though sometimes there is some poor luck involved such as with unexpected medical emergencies). Nevertheless, the United States federal bankruptcy laws allow you a fresh start in many cases.

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It’s always wise to carefully evaluate all of your options before making a financial decision. That’s especially true when it comes to bankruptcy because of the long-term consequences, and there are many options that people consider including reverse mortgages. What exactly is a reverse mortgage and is it a good idea for paying off your debt?

Reverse mortgages are loans that specifically target senior citizens and involve using their home equity. You must be at least 62 years old to receive a reverse mortgage.

Let’s say you own a $200,000 home, and you own it free and clear (which means you don’t owe the bank anything anymore). You can borrow a certain percentage of the equity in your home, and that amount will be paid to you at a specified time such as on a monthly basis. You won’t have to make any mortgage payments, and nothing has to be repaid until the senior citizens move or die. (You don’t necessarily have to own the home free and clear, as some lenders will simply use whatever equity you may have.)

This might sound like a fantastic bargain, but remember that the loans have to be repaid eventually. If you don’t repay them, then the lender can take over the house and leave your heirs with nothing. If you don’t have any children or grandchildren that will inherit your house, this may not be such a bad idea. You could use the money as income and not worry about what will happen to your house when you pass on.

Otherwise, you need to be very careful about this option. If you want to bequeath the house to someone you love, then that loan has to be repaid at some point. Also, you need to make sure that you’re dealing with a good lender and not someone who pushes or tricks the elderly into making decisions that are not in their best interest. A reverse mortgage may also change how the government views your benefits like Social Security and Medicaid. The rules change from time to time, so you should look into this as well.

If you want to keep your home but have a large amount of debt, bankruptcy may be the better option. We’re not saying this is always the best option, but the point is that you can wipe out debt while protecting your home (depending on the homestead exemption in your state and how much debt you owe). You shouldn’t be so quick to put up your house as collateral in order to pay unsecured debt like credit cards and other financial obligations.

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Within the past couple of years, new bankruptcy laws have been put into place. These laws make some sweeping changes to the old laws, and in some places, certain regulations were completely revamped and almost rewritten. The reason for this change was because people were taking advantage of the old laws in a big way. For example, you used to be able to file bankruptcy almost on a whim, and you could do so frequently, which meant that many people would file, then get themselves into financial trouble again in very short order, then repeat the whole process.

This type of abuse is no longer possible with the new bankruptcy laws. But the laws were put into place for a reason, and for the person who has a legitimate need to file, these laws might seem cumbersome but they are actually to your advantage. Perhaps not in all cases, but learning to work within the laws can make the whole process much easier for you.

First of all, you need to know exactly where you are financially. Too many people think bankruptcy is their only way out of a tough financial situation and have not taken the time or put forth the effort to thoroughly check out their options and alternatives. You can do this easily and inexpensively (in many cases, free) via a bankruptcy evaluation from a qualified lawyer who understands the process and the laws in your state.

With the new bankruptcy laws, there is a time period during which if you have declared bankruptcy in the past, you cannot file again. This time period varies from state to state but it is definitely not whenever you want. There are also certain types of debts that cannot be eliminated by bankruptcy, like tax liens, child support, and previously filed judgments against you from an irritable creditor.

Bankruptcy does not necessarily mean that all your debts will be wiped out, although that is what most people hope will be the outcome. Rather, the courts take a detailed look at your finances and then decide which chapter of bankruptcy you may file for. If the decision is Chapter 13, then your debts are not wiped out but they are “reorganized” with lower monthly payments, but you are still required to pay them. If you are approved for Chapter 7, then your debts that are eligible are wiped out.

But again, this is not your decision. This is another reason that it is well worth your time and perhaps even expense to be represented by a qualified bankruptcy attorney who understands these issues and knows how to present your finances to the court in a light that may render the decision you wish to receive.

Bottom line: get a bankruptcy evaluation and fully understand what your options and alternatives are, and if bankruptcy is it, then you can also understand what to expect, which will enable you to make an intelligent decision as to whether or not you should proceed with it or not.

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A lender is required to file a foreclosure in a courthouse in judicial states. The process is similar to any other lawsuit where a summons and complaint are served to the homeowner. The foreclosure complaint will outline all the details of why you are being foreclosed on and will notify the homeowner when they need to file a response. Homeowners in judicial states have more rights than a homeowner who lives in a non-judicial state. In a judicial state, the foreclosure process can take a few months to a few years depending on how behind the courthouse is. The foreclosure process generally takes longer to complete than a non-judicial state. A homeowner who lives in a judicial state can stop foreclosure at any time by bringing their mortgage payments current.

Foreclosures usually progress more quickly in non-judicial states. For homeowners who live in the south foreclosure can progress even faster. In non-judicial states, a lender can foreclose on a homeowner without going to the courthouse and getting a judgment against them. North & South Foreclosure laws are governed by the local state statues. In non-judicial states, before a lender can auction of a homeowners’ home they must first:

1. Send a Notice Of Default.
2. Post a notice on the home stating that the property is being foreclosed on.
3. Publish a notice in your local newspaper or business journal stating that you are in default of your mortgage agreement.

Once your lender has completed the above steps in a non judicial state they are permitted to sell your home in a foreclosure auction (a.k.a. “Sheriff’s Sale”). After the auction the homeowner no longer owns the property. The foreclosure process in a Non-judicial state can be very cut and dry with little recourse for the homeowner once the property is sold in a foreclosure auction. A handful of non-judicial foreclosure states allow the homeowner a “redemption period” where they can buy back their homes. Sadly the redemption period in non-judicial states is usually a small window of time and most homeowners aren’t able to purchase their homes back in time. Once a homeowner’s financial situation continues to go south foreclosure is almost inevitable. Other than a redemption period, a non-judicial state offers no other foreclosure alternatives.

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Are you stressed by a mortgage payment you can’t afford? Does foreclosure seem like a very real possibility? There is assistance available in the form of reduced payments if you know what to do. We will discuss how you should go about preparing to make a call to your lender for loan modification. Since you can only apply once, you want to do it right the first time!

We will discuss 3 critical steps to approval:

1. Convince your lender that you need and are a worthy recipient of assistance in the form of loan modification. This is done with a hardship letter, which is a concise explanation of your financial hardship. You need to compile an explanation of the causes of your precarious financial situation and inability to pay your mortgage payments. You also need to present the changes you have made in your budget that would allow the responsible payment of a lower payment and your commitment and resolve to do just that. Your goal is to help the lender understand your predicament and want to help you.

2. Prepare your financial statements and budget. To establish your eligibility, your lender will require a detailed worksheet or your monthly financial expenses and income. A major component of this budget preparation is the new monthly payment you are requesting. Do you know how to go about calculating your target payment?

3. Compile the necessary documents that your lender will need to review and validate your application for a loan modification. Be completely sure that you have correctly filled out the forms and attached the correct documentation. Be aware that your application will be one of thousands of others and only the completely correct packages will get quick review and a good opportunity for approval.

Don’t be intimidated by the process; complete each step carefully and you can receive the loan modification help you require from your bank. They will receive financial incentives for each loan modification they complete, so if you meet the eligibility requirements, they are motivated to grant your approval. You need to only take the first step today to be on the way to a new lower monthly payment and staying in your home.

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We live in a troubling time regarding consumer debt. For years (or perhaps for decades), Americans have become accustomed to spending more than they earn. Through the miracle (or curse) of a credit card and all its charging privileges, more and more people have come to join the financial club for those drowning in debt with no end in sight.

Bankruptcy may seem like a frightening scenario, but there are other scenarios that are more frightening, and they may already be part of your everyday experience. Here are 10 simple signs that your debt is out of control and that you may need to sit down with a financial adviser or even a bankruptcy lawyer:

– you and your spouse fight on a daily basis because your debt is out of control and you have no ideas for how to fix it.

– you wake up in the middle of the night or have trouble sleeping to begin with because you’re constantly worrying about your looming debt problems

– you avoid answering the phone or feel nervous every time it rings because you know it’s probably a bill collector trying to get payment from you

– you take a cash advance from one credit card to pay another credit card

– you avoid visiting the doctor despite some troubling symptoms because you cannot afford the co-pay on your insurance

– you constantly are asking your friends for small loans in order to buy groceries or make your car payment

– you’re having difficulty paying the minimum payments on your credit cards

– you avoid getting important preventive care such as a dental checkup because you can’t afford the dentist bill

– you have to use your credit card to make a small purchase at a fast food restaurant or to buy gas

– you are starting to sell off some of your treasured belongings in a garage sale or at a pawn shop to raise some much-needed cash

If some of these scenarios are familiar to you, you definitely have a financial crisis on your hands. You don’t have to be starving or losing your house in order to consider bankruptcy as an option, either. If you can’t see yourself paying off your debts during the next few years while maintaining a reasonable standard of living, you should at least consider the possibility. No one is saying that you should take bankruptcy likely or that you should make a decision without thinking things through. However, speaking with a professional is a good idea.

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Bankruptcy has helped many families out of overwhelming debt by giving them a fresh financial start. However, there are many situations in which bankruptcy is not the best solution available. Bankruptcy may be the wrong solution for you, and you need to study your situation closely. Here are five cases in which bankruptcy is not the best option:

1. You can pay off your debts within a few years while maintaining a reasonable standard of living

Sometimes having some discipline and setting a budget is all you need to do in order to pay off your debts within a reasonable time. You don’t need to starve yourself, but if you can stick to a simple plan and eliminate your debt within the next few years, then bankruptcy may not be necessary after all.

2. Your most worrisome debts will not be eliminated in bankruptcy

You should be aware that some kinds of financial obligations do not usually go away when you file bankruptcy. If you are most concerned about student loans, child support obligations, or criminal fines, then bankruptcy is not the solution. In most cases, these financial obligations will remain.

What about federal income taxes? That depends, but be aware that in many cases they will not be discharged.

3. You don’t want to lose your assets.

When you file Chapter 7, you will need to liquidate any nonexempt assets in order to help pay for your debts. You may not want to give away these assets, such as a second house or an expensive car. Finding a way to pay off your debt without bankruptcy can help you keep these assets safe from creditors.

4. Most of your debts are secured by collateral.

If your unsecured debts are only a small portion of your total obligations, then bankruptcy doesn’t make sense. Chapter 7 will not eliminate your responsibilities such as paying off your mortgage or car loans. If you want to keep the house, you’ll have to keep making the mortgage payments. Otherwise, you can just lose the house without having to declare bankruptcy.

Chapter 13, on the other hand, can help you reorganize the debt and catch up on your mortgage payments over the next few years.

5. You don’t really owe creditors the money.

This may not occur in those cases, since so many people have legitimate debts. Still, if you do not think you owe something, by all means fight it instead of giving up and declaring bankruptcy.

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Bankruptcy is an enormous financial decision, and before you take that leap you need to examine your finances to try and cut as many expenses from your budget as possible. You may discover that your debt is more manageable and that bankruptcy may not be necessary.

Here are several types of expenses you need to examine thoroughly when bringing your budget down to size:

Gifts

Do you like to give expensive gifts that you can’t afford in order to impress your friends? This is a practice you need to stop if you want to get handle on your debt.

New car payments

If your situation is bad enough, you may be better off selling your new car to get out from underneath the financial burden and simply replacing it with an older but reliable car.

Impulse purchases

This is related to doodads, but we would encourage you to look around the house and count up the number of things that you have purchased over the years. You’ll be amazed at how many things were not needed and may have not even been used very much.

Credit card purchases

This should go without saying. If you want to stop the financial bleeding, you have to stop spending money that you can’t afford to spend. You certainly have to stop charging things on credit cards. If you already owe a substantial amount and are barely able to make the minimum payments, then you may need to consider professional help like bankruptcy. You should at least discuss this with a professional like a bankruptcy attorney because you could easily spend years simply paying the interest on your current credit card bills.

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