Get Ahead of the Game

What if I told you there was a no-fail way to stop foreclosure dead in its tracks? And, that, while you’re at it, you can lower your mortgage payments forever? I know it sounds too good to be true, but it’s within your grasp if proposed changes to the U.S. Bankruptcy Code are passed this year—and if you play your cards right.

Currently, Chapter 13 bankruptcy can lower your non-mortgage debt payments, but it can’t change your mortgage terms. On the upside, you’ll have more money left to pay your sky-high mortgage bills. The downside? Your mortgage bills will still be sky-high.

When the new and improved Chapter 13 goes into effect, however, a judge will be able to adjust your mortgage. For instance, say you’re paying off a $300,000 loan, but your house is now only worth $150,000 thanks to that annoying real estate bust. A bankruptcy judge could agree to bring your loan down to $150,000 as well. So now all of your debts—including your mortgage—are reduced.

It’s enough to get you jumping for joy, right? Especially if the bank is after your home. But don’t get too excited just yet. You wouldn’t run a marathon without training first, right? Well, the same idea can be applied to bankruptcy. You’ve got to get in shape before filing. For the most part, qualifying for Chapter 13 is a no-brainer. But keep in mind that you do need to have a court approval. Don’t worry, the judge won’t expect an overnight financial makeover—if you could manage that, you wouldn’t be filing in the first place (and I’d probably be asking for your advice). But they do want to see evidence that you are making an effort.

If you’ve been missing payments, start communicating with creditors. Ask for a loan modification that will lower your rates and payments. The point isn’t for them to grant it—the point is to build a record that proves you’re doing everything in your power to pay your mortgage. It also helps to be on your best behavior. Obviously, this is not the time to max out credit cards or take out new loans—creditors aren’t afraid to point out to the judge that you’re spending an awful lot for someone who can’t make existing bills. However, show the judge that you’re a responsible person who has fallen hard times, and you’re a shoe-in.

Yes, it does take a little work. But that’s where our team of professional bankruptcy attorneys comes in. We’ll guide you through the process. Not only are we experts in current bankruptcy law, but we’re keeping tabs on the latest developments—and how they can benefit you. Sign up for our free debt analysis to get started. When the Chapter 13 changes arrive, you’ll be ahead of the game.

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