Chapter 13 Can Help Tennessee Homeowners Thinking Of Walking Away From Mortgage
More Tennessee homeowners are walking away from their homes - and walking into a new set of problems.
Thanks to plummeting home prices, a growing number of borrowers now owe more on their mortgages than their homes are currently worth. With no way to downsize without taking a loss, some are choosing to strategically default. In other words, even though these homeowners can afford to make loan payments, they're opting to save their much-needed dollars by walking away from their home and mortgage.
But before you seek a short-term fix, Tennessee bankruptcy lawyers recommend considering how it will affect you and your finances in the long run.
Yes, cutting out mortgage payments will leave homeowners with some extra money each month - a helpful luxury amid rising grocery and gas prices. But so would eliminating some of the other debts - from credit card debt to medical bills - that are causing so many Americans to struggle with finances.
Filing for bankruptcy can preserve the roof over your head while relieving the pressure of other payments. It also offers something else that strategic default doesn't - protection.
Walking away from a debt obligation severely damages credit, lowers your chances of receiving future loans, and put you at risk for legal retribution by lenders. Now that walking away from mortgages is becoming a trend, lenders are taking it very seriously - and many are willing to take borrowers to court to seek a full repayment.
A recent article by MSNBC.com suggests that people are finding it easy to walk away from their obligation because getting a home loan today is so impersonal. Many of us don't know who owns our loan. When we try to qualify for a loan modification, we can't find the right person to handle our application. What can be the harm in defaulting when you're not even sure who you're defaulting on?
But just because something is easy to do doesn't mean it's the right thing to do - morally or financially.
Bankruptcy, unlike the lending process, was created with the consumer in mind. Its entire purpose is to help struggling US citizens. When you look into your bankruptcy options, you'll be able to discuss your finances with a real live Tennessee bankruptcy attorney, not just some random employee at a mega-bank.
In the case of Chapter 7 bankruptcy, homeowners can wipe out debts completely. If you don't qualify for Chapter 7, Chapter 13 bankruptcy can help by creating an affordable repayment plan for unsecured debts. When other obligations are lowered, many Tennessee bankruptcy attorney clients find their mortgage becomes less of a burden.
If you're considering a serious financial decision like walking away from your mortgage, take the time to speak with a legal professional first. Bankruptcy may be a better solution.
More Blog Entries:
Tips for Refreshing Finances in 2012 with Tennessee Bankruptcy: January 1, 2012
As Home Prices Fall, More Borrowers Walk Away, by John W. Schoen, MSNBC.com