Bankruptcy Might Offer a Better Way for Chicago Homeowners to Stop Foreclosure

The good news: almost a quarter of a million homes have received lower mortgage payments since the inception of Obama's foreclosure relief program last year.

The bad news: not all of the modifications will last.

A rising number of homeowners are defaulting despite receiving cheaper mortgages. Defaults almost doubled last month alone, according to the New York Times.

Sure, everyone can benefit from a lower house payment. But often times a lower payment alone is not enough to solve our financial problems. What we need is a plan that addresses the root of our inability to pay the bills - for many of us that means eliminating credit card debt.

With interest rates at all-time lows, a mortgage modification might only knock a few hundred bucks off your payment. That's not much for the majority of Americans, who are struggling to pay IRS debts, medical bills and the No. 1 cause of financial trouble - credit card debt. When the recession put us in a tight spot, many of us turned to credit cards to cover the gaps in our income, and today we're left with the consequences - growing debt.

To make matters worse, banks are tightening credit, hiking interest rates and slapping us with new fees every day. Continuing to rely on credit can be a one-way ticket to foreclosure, whether or not you're lucky enough to get a lower mortgage.

Instead of waiting for Uncle Sam to bail you out temporarily, why not go for a permanent solution? Bankruptcy can clear up non-mortgage debts like your credit card balance, unpaid hospital bills and tax debt so you'll have more money leftover each month to pay the mortgage. Look at it as a permanent loan modification - but one you don't need bank approval to receive.

Not sure if bankruptcy is right for you? Have concerns about how bankruptcy will affect your finances? Don't sweat! When you sign up for a free personal debt analysis, a Chicago bankruptcy attorney will answer your questions and queries - and identify a bankruptcy plan that suits your individual needs. You've got nothing to lose - except, of course, your debt.

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