Chicago Bankruptcy Lawyers Explain There’s No Such Thing as a Free Foreclosure
On Tuesday, the federal government made a deal with mortgage company execs to perform 500,000 loan modifications by Nov. 1 - a significant scale back from than the 3-4 million first expected to be helped by the Making Home Affordable program. While Uncle Sam struggles to revive its ailing loan modification incentive program, some homeowners fed up with waiting are opting for what they figure is the easy way out - they stop making mortgage payments and surrender their home to the bank.
But foreclosure isn't free.
When you give up your home, you lose more than the roof over your head - you lose your credit and any equity in your house. And just because you aren't paying the mortgage doesn't mean your financial obligations are over. In some cases, you can be held responsible for the remaining balance once your loan servicer sells your house, meaning you lose future as well as current financial independence - especially if you're already in debt.
You also lose the battle with your bank. In my last post, I talked about the banks' dirty little secret - they want you to be delinquent. It's actually most lucrative for them to keep you close to foreclosure so they can charge late fees and other expenses associated with prepping your house to be sold.
So if there's no such thing as walking away from your home free and clear, why do it?
Especially when there's a guaranteed way to keep your house, get current on you mortgage and eliminate your debts - and you don't even have to wait for the government to make it happen. You can make it happen. And the sooner you do, the better.
It's called Chapter 13 bankruptcy and it's always been your legal right as a U.S. citizen. If you're deep in debt, giving up your home won't solve your financial woes - it will just increase them, because now you'll owe money and have to find a new place to live. Chapter 13 allows you to eliminate your debt once and for all with an affordable payment plan.
Wondering if bankruptcy would be a better choice for you? Just sign up for a free personal debt analysis with a DebtStoppers attorney in Chicago or Atlanta. Because you shouldn't have to pay to give up what's already yours.