Tag Archive | "Debt Management"

Filing for Bankruptcy Protection in Georgia

Filing for Bankruptcy Protection in Georgia

A State-by-State Guide to Filing for Bankruptcy Protection: Georgia

Bankruptcy laws vary from one state to another. Here is a breakdown of Georgia bankruptcy guidelines to help you understand the differences when filing for Chapter 7  Bankruptcy vs. Chapter 13 Bankruptcy.

Georgia Bankruptcy Guidelines

A Georgia bankruptcy lawyer will probably begin your consultation by explaining the difference between Chapter 7 and Chapter 13 bankruptcy. This often includes what is called a “means test.” This involves asking some very personal questions about your assets, debts and your financial goals. The answers you provide to these questions will help you and your bankruptcy lawyer determine if filing Chapter 7 or Chapter 13 bankruptcy is right for you.

Chapter 7 bankruptcy is usually called “liquidation” because the bankruptcy trustees in Chapter 7 bankruptcy cases may opt to sell any non-exempt property the debtor owns. In many Chapter 7 bankruptcy cases, the debtor does not own any non-exempt assets, so no property is sold. Unsecured debts may be completely discharged in Chapter 7, making it an attractive bankruptcy option.

If you are filing Chapter 7 bankruptcy, find out from your Georgia bankruptcy lawyer which and how much of your assets may be exempt from liquidation.

Georgia State Bankruptcy Exemptions


* $10,000 for real or personal property, $20,000 if property owner is married.


* 75 percent of weekly earnings.


* Your interest in up to $3,500 in all motor vehicles.

Personal Property

* $1,500 for any implements, professional books, tools of the trade.
* Up to $300 in value in any one item.
* Up to $5,000 in household furnishings, good, clothes, appliances, books, animals, crops or musical instruments.
* $500 in jewelry.
* Certain retirement and insurance benefits may be fully exempt.

Note: Keep in mind all state bankruptcy laws and exemptions are complex. If you need legal advice or want to fully understand how Georgia laws affect you, please speak with an attorney in Georgia. State bankruptcy laws are subject to change at any time. For the latest information, read the full text of Georgia bankruptcy laws.

Links to Georgia Bankruptcy Lawyers:



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I Need A Debt Management Expert!

I Need A Debt Management Expert!

Image by TW Collins via Flickr

In today’s world there are no shortage of people with debt management issues. So where do you go for debt management help? Here are a few quick tips from the debt management expert…

1) Go to Debt Management Expert web sites: This site is organized to give you helpful advice on a variety of debt management issues. We are specifically looking at large issues involving your home and credit. We also recommend that you look to other debt management sites to get helpful tips. There is no substitute for reading up on the issues that you face and looking at how different experts recommend you approach those issues.

2) Talk to people who may be in similar debt management situations: They may not be debt management experts but they certainly will give you another perspective. It may be uncomfortable but it is highly likely that someone in your situation has tried something to help their situation that may actually help your situation. If you don’t know anyone directly join a debt forum and learn in a more anonymous fashion.

3) Explore debt management and debt settlement companies as potential debt management experts: These companies can help but there a both pros and cons to working with them. Make sure you really understand what you get out of this before taking the dive. Many are debt management experts but they are also trying to make a buck. For more information on this read our recent post: Enrolling in a Debt Management Plan to Help Your Monthly Budget and How Debt Management and Debt Settlement Companies Can Simplify Your Financial Life.
4) Attorneys as debt management experts: Talk to a bankruptcy attorney or a loan modification attorney. Attorney’s can be a good solution if you need to modify your loan or if you are considering bankruptcy, but again this comes down to your specific situation. Don’t limit you conversation to one attorney. Talk to several if you go this route and then toughly reference them to make sure that they are debt management experts with good track records.

If you spend the time to do all these well, the next time you look in the mirror you may see a Debt Management Expert.

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Creating a Personal Budget and Sticking to It

Creating a Personal Budget and Sticking to It

Have you ever tried managing your money by creating a personal budget and sticking to it? Do you find that managing your money works or does it seem like a waste of time? The hardest part about managing your money by creating a personal budget is using information from it to modify your spending habits.

With any household budget when you are trying to manage your money, you should be trying to prevent overspending, not only on the large, more infrequent expenses such as vacations, major repairs, end-of-the-year holidays as well as birthdays, but also on the day-to-day and monthly expenses that you incur throughout the year. Only after you have a handle on what and how you are spending does sticking to a household budget make sense and seem worthwhile. It is important to have control over your expenses, even if money management does seem to be somewhat illusory.


One recommended approach to managing your money by creating a personal budget is to carefully track your spending during the month and then adjust your budget targets up and down in each category, so that your total expenses never exceed your income.

There are many software programs that can help you create a personal budget to track your expenses, however those programs can only display results based on the information provided by you. It is up to you (and your significant other, if applicable) to designate categories for each type of expense in your household budget.

While those categories in your household budget only need to make sense to you, expenses allocated to those “buckets” should be done consistently so that you can track and compare expenditures over time. It rarely matters what you are overspending on — dining out, entertainment or clothes, for example. What matters more as far as managing your money is knowing where it was spent and how that amount differed from the same time period measured previously, for example, so you determine how and where to best change your spending habits within your household budget.

Whether you would like to buy a new or newer car, put a down payment on a new home, or do a major house renovation project – non-discretionary expenses all of which can run into the tens of thousands of dollars in your household budget, you need to be able to carefully track other costs so that you can build the “rainy day” funds to afford those bigger expenses. And when it is anything other than a one-time non-discretionary expense, tracking costs becomes even more significant so that you stick to the household budget allocated for the project.

Understanding Your Expenses
Tracking expenses is helpful, but managing your money also involves understanding the types of expenses in your budget. Here is a list of some expenses, delineated as fixed, committed or non-discretionary that may impact your household budget. Committed expenses are not required for survival, but they are expenses you commit to for yourself or your family that generally impact your household budget and your quality of life.

Fixed (essential)
Home mortgage or rent
Basic food and clothing needs
Essential household expenses
Basic utility bills
Student loans

Insurance premiums
Charitable contributions
Non-essential utility bills (satellite TV service, internet, phone – land line and cellular)
Health/sports club memberships (for self, and spouse and children, if applicable)
Music lessons (for self, and spouse and children, if applicable)
Sports equipment (for self, and spouse and children, if applicable)

Non-discretionary (optional)
Car purchase
Home purchase
Home renovation
Home repairs
New home appliances
Dining out
Entertainment (e.g., movies, theater, sporting events)
Holiday/birthday gifts
Other clothing or consumer goods purchases

Establishing a baseline for what is an acceptable allocation of expenses and keeping a lid on your committed and non-discretionary expenses, compared to your monthly and annual income, will go a long way toward helping you succeed with managing your money by creating and sticking to your household budget. Doing so will also provide you the maneuverability to save for retirement, long-term non-retirement savings, as well as to save for “rainy” day expenses and isolated “fun” expenses that you may not want to track in your household budget.

For a lot of people, part of the difficulty in reducing committed and non-discretionary expenses comes from the need to make big monthly credit card payments. If you’re carrying a substantial amount of non-mortgage debt in your household budget, you should cut up your credit cards and aggressively pay down your debt first before allocating funds for long-term and retirement savings, unless you or your spouse’s employer is contributing a matching amount toward that retirement account. Cutting back on matching funds from your or your spouse’s employer is not a good way to manage your money since it is like leaving free money on the table.

The real secret to creating a personal budget that really works is creating a sustainable structure for your finances, one that balances spending and income and that leaves enough room to handle the unexpected.

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Ten Tips to Increase Your FICO Score

Ten Tips to Increase Your FICO Score

Here are 10 tips to help you increase your FICO score by using credit responsibly.

In order to keep your finances in great shape and increase your FICO score, it is important to use your credit responsibly.

Your FICO score is a score created by credit bureaus such as Experian, Equifax, and TransUnion. Institutions lend money based on the FICO score created by credit bureaus. Here are some tips for keeping the FICO score in good shape.

1. To Increase Your FICO Score, Pay Your Bills On Time
Late payments have a negative effect on your FICO score. Do your absolute best to make sure every payment arrives on time. If you have missed payments, get caught up. The longer you have a good record of paying your bills on time, the more your FICO score will increase.

2. To Increase Your FICO Score, Keep Balances Low on Revolving Accounts
Credit cards are a type of revolving credit. This means you can pay off the line of credit and then use it again. Keep balances low on this type of credit. Having high amounts of credit card debt will lower your FICO score.

3. To Increase Your FICO Score, Pay Off Credit – Don’t Just Move it Around
Moving credit around is not the same as paying it off. Your FICO score will increase if you consolidate your credit. If you have a balance, but fewer open accounts, your FICO score will increase.

4. To Increase Your FICO Score, Don’t Open Accounts Your Don’t Need
People will often open a number of accounts in order to try to increase the amount of available credit. This strategy can often backfire and lower your FICO score, instead of increasing it.

5. To Increase Your FICO Score, Avoid Collection Accounts
Be aware that any account that has gone to collection will stay on your credit report for seven years. These accounts will negatively affect your FICO score.

6. To Increase Your FICO Score, Open Accounts and Pay Responsibly
If you’ve had trouble in the past with credit, it pays to open a new account and use it responsibly. Establishing a pattern of responsible credit use will help to increase your FICO score over time.

7. To Increase Your FICO Score, Avoid Closing Accounts
Closing an account doesn’t make that account disappear from your credit history. Each account you’ve opened and closed will show up on your credit report and will affect your FICO score.

8. To Increase Your FICO Score, Use Credit Cards
People who have no credit history have a difficult time obtaining credit. It’s important to obtain credit early on and use it responsibly. People who do this have higher FICO scores than someone who never uses credit at all.

9. To Increase Your FICO Score, Seek Credit Counseling
If you are in trouble with debt and your FICO score is lower than you would like, it’s a good idea to seek the advice of a legitimate credit counselor. These counselors can help you navigate your credit report as well as help you make a concrete plan to help you increase your score.

10. To Increase Your FICO Score, Remember it Takes Time
Remember, there are no quick fixes for increasing your credit score. It takes time to establish a good credit history, or to repair damaged credit. If you look at it as a process, you’ll be able to create solid goals and to achieve them.

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What if I Find a Mistake on My Credit Report?

What if I Find a Mistake on My Credit Report?

Mistakes found on your credit report can be avoided by and/or corrected by following some straightforward procedures.

A big part of being fiscally responsible these days is checking on your credit report. Individuals can get a free credit report from each of the major credit reporting bureaus — Equifax, Experian, and TransUnion — every 12 months. Checking your credit report is as simple as having these bureaus send you a copy of your credit report and looking it over. Most of the time, these credit reports are correct. But what do you do if you find a mistake?

Credit Report: Check Each Credit Card Account
When you check over your credit report, you need to check each credit card account. The information on the open accounts should match the information you have in your records at home. Check each credit card, including card numbers, balances, and payment histories. If a discrepancy is found, you should contact your credit card company and check your information against theirs. If it is the credit card company’s error, they will correct it and notify the credit bureaus during their next reporting cycle. If it is not their error, you will need to check with the reporting credit bureau to see if the error originated with them. If so, you’ll need to send the credit bureau a copy of your most recent credit card statement, so that the credit bureau can correct their mistake.

Credit Report: Check Your Credit Card Payment History
It’s also important to check payment histories. Payment history can help or harm your credit score (your FICO score) and it is important to be sure that these are correct. If you find a discrepancy, find the documentation necessary to prove yourself and send that to your credit card company. These errors may take a little time to fix, but this is something you can do yourself.

Credit Report: Check All Closed Accounts
Check all closed accounts that are listed by the credit bureau on your credit report. Be sure that the credit report shows no balances on those accounts and that all the accounts are closed. If you believe a credit card account is closed, you will need to get proof of this from the credit card company and send that on to the credit bureau in order for them to correct this mistake.

Credit Report: Contact Credit Card Company if You Find a Credit Report Error
If you find an open account on your credit report that is not yours, contact the credit card company and the credit card bureaus immediately. This can sometimes happen when someone with the same name opens a credit card account and it is accidentally attached to your credit report. Once information such as social security numbers and personal information are verified, these mistakes are usually quickly fixed by the credit card company or credit bureau.

Credit Report: Keep Copies of Correspondence With Credit Bureaus
When dealing with credit bureaus while trying to fix a credit report, it’s a good idea to keep copies of all correspondences you’ve had with the credit bureaus and the credit card companies. These can be useful if the dispute with the credit bureaus or credit card companies is not easily solved.

Credit Report and Fraudulent Activity
If you find evidence of fraudulent activity or identity theft on your credit report, it’s best to contact an attorney or law enforcement official immediately, as well as to let the reporting credit bureaus know. Fraud is not something you can settle yourself and will need to be professionally handled.

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Sample Hardship Letter for Loan Modification

Sample Hardship Letter for Loan Modification

Here is a specific example of a hardship letter you could use for a loan modification if you faloan-modificationll behind in your payments. For a little more detail on putting a hardship letter together see: Tips on How to Write a Hardship Letter for a Loan Modification or Short Sale.

A hardship letter is a letter written to your bank or mortgage company telling them why you can no longer afford to make the payments on your home. This letter describes your hardships and specifically what has happened that caused you to fall behind.

Based on the current credit environment, hardship letters are being used as a tool to help homeowners avoid foreclosure on their homes. The result can be a modification of the loan or the acceptance of a real-estate short sale by the bank.

Sample Hardship Letter for Loan Modification:


To Whom It May Concern:

Our family purchased our home in (Date).

Since that time, a number of unfortunate circumstances have impacted us. These circumstances combined with the rising costs of food and the economic slow down have caused us to be delinquent on our mortgage payments. We love our home and want to stay in it and would like you to consider working with us to modify our loan.

In the last few months our financial situation has gotten difficult. Specifically, (This is where you need to explain the specifics of your situation. Example: Our adjustable interest rate went up and our payments increased from $x to $y, lost one of our jobs, medical emergency….). As a result of these unfortunate circumstances we can no longer afford our mortgage payments.

We feel that if we could get our loan modified, we would be in a better situation and could make our payments. We would appreciate if you can work with us to lower our payment so we can keep our home.

We have enclosed copies of our financial statements.

(You would attach copies of proof of income {paycheck stubs…}, Proof of hardship {late notices you received recently}, Bank Statements for last 2 months, past 2 years income tax return)

We appreciate all of your help as our family goes through these hardships.


Home Owner Name(s) ___________________


Loan # ______________________



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What Should A Homeowner Do Upon Receipt of a Foreclosure Notice, NOD, or Notice of Default?

What Should A Homeowner Do Upon Receipt of a Foreclosure Notice, NOD, or Notice of Default?

202px-foreclosedhome3If you are behind in your mortgage payments, it is likely you have received a Notice of Default (NOD) also known as a Foreclosure notice from your lender. A Notice of Default (NOD) is a public notice to you, as well as the world, that you have defaulted on your mortgage and the lender intends to take foreclosure action if you do not pay by the regulated redemption period. What should you do if you receive a NOD?

Immediately Contact the Lender

You must NOT ignore the NOD, other foreclosure proceedings, or your lender. Call them at once and tell them about your situation. Most lenders are willing to work with their borrowers on keeping their loan in good standing and helping through financial difficulty to ultimately avoid foreclosure. The problem arises when borrowers have financial difficulty and simply stop paying on their mortgage without any explanation to the lender.

Discuss the Mortgage Payment Options

When you contact your mortgage lender, discuss with them your financial situation and what you can do to keep your loan current. If you have a significant change in your income, or your mortgage payment was increased considerably, you may be eligible for a loan modification based on your current income.

A loan modification changes the terms of the loan, such as the interest rate or lifespan of the loan, to create a lower monthly payment. While this means less income for the lender, if you are unable to meet your current mortgage obligation, yet still have a regular income, it is a better alternative than foreclosure. You will have to provide financial information and a hardship letter to your lender. If you are not comfortable with mortgage terms and issues, hire a professional service to negotiate on your behalf.

In addition, you may discuss payment forbearance or forgiveness of past-due debt. In many cases, lenders are willing to forbear loan payments up to three to six months to help a borrower get back on his feet financially. In cases of extreme financial difficulty, some lenders may even forgive payments and fees in arrears and allow the borrower to start fresh if they promise to keep current.

Consider a Short Sale Before a Foreclosure

There is almost no reason to walk away from a home and allow a lender to foreclose. If, ultimately, you cannot afford the mortgage, you can sell the home and pay the lender what is owed on the mortgage. However, this may be more difficult if you owe more than what your home is worth on the market. Many homeowners in mortgage trouble are finding this to be the case with falling real estate market values.

However, a lender can be persuaded to accept a “short sale” on a home. In this situation, they agree to let you sell the home for the lower market value, pay them the full proceeds from the sale, and then write off the outstanding balance. Why do lenders agree to a short sale? Ultimately, it is cheaper than proceeding through a full foreclosure process, which involves attorney’s fees, holding losses, and an inevitable short sale from the lender’s end as well.

A NOD is not the end of the road for a homeowner. It is just the first legal process in foreclosure. Remember that you have the right to discuss and re-negotiate your mortgage. Although you may lose your home, there are options to sell so that the lender does not foreclose and you prevent further credit issues.

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Should I Trust My Bank or Hire a Negotiator To Modify My Mortgage?

Should I Trust My Bank or Hire a Negotiator To Modify My Mortgage?

loan-modification-should-i-trust-my-bankIf you’re having trouble keeping up with your mortgage payments, then perhaps a mortgage loan modification might be the answer. A loan modification can reduce your monthly mortgage payments and help you keep current with your mortgage based upon your financial means. However, when you talk to your bank or mortgage lender about a modification, are your or the bank’s best interest involved?

The bottom line is the answer to this question. The bottom line for the lender is to make income in the form of interest on money they lend to others. If a borrower fails to make payments as agreed in the mortgage terms, then the lender may have no choice but to foreclose on the home and recoup their losses on the resale of the home. Usually a foreclosure is a great expense to the lender in attorney’s fees, filing fees, and losses incurred while holding the property for sale. All efforts to avoid foreclosure should be taken by the lender, including modifying the loan in extreme cases to help a borrower repay the loan.

Getting Professional Modification Help

Although foreclosures are not desired by lenders, they still have many strict guidelines in making and modifying mortgages to suit the owners and investors of the lending company. Subsequently, it may appear ironic that lenders want to avoid foreclosure, but are also not willing to work with borrowers to negotiate a reasonable settlement for both parties.

A professional foreclosure help specialist company can help you with a loan modification by talking to your bank directly and working with them on your behalf to resolve a mortgage into more affordable terms. These companies are usually run by experts in the mortgage finance industry and present many advantages over a DIY endeavor:

Experience – Many of these professional modification negotiators have been operating for years and have extensive experience in negotiating new mortgage terms. They are familiar with the foreclosure and loan modification process and know what it takes to reach a deal, with even the most stubborn lenders.

Contacts – Foreclosure help specialists usually work with the biggest loan mortgage companies in the country and have many contacts within each. By having and continuing good relations with lenders, they have an upper hand in renegotiating your contract.

Results – In most cases, foreclosure help can secure an agreeable mortgage modification that is acceptable by both lender and borrower. If not, then they can work with the lender on an exit plan to avoid foreclosure by a short sale. In a short sale, you may end up selling your home for less than is owed on the mortgage, but the lender accepts the short amount and writes off the balance. This bodes much better for your credit report than foreclosure.

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Can A Credit Repair Agency Help You?

Can A Credit Repair Agency Help You?

202px-credit-cardsCredit card offers typically overrun the mailboxes of millions of American consumers. These offers usually make it incredibly easy for those with moderate or even poor credit to obtain a credit card. Sadly, in many cases, poor consumer habits result in maxed out credit card debt and even collection on past due accounts. What can be done to help pay off debt and repair one’s credit score?

Enter the era of credit repair specialty companies. These debt relief businesses offer consumers with credit issues a means to help eliminate debt, clear up credit issues with the three major credit reporting agencies, and start building a good credit history. However, with any industry filled with desperate consumers begging for help, there are good services, bad services, and the ugly services.

The Good Credit Repair Services

A good credit repair service will offer to work with a consumer to reduce debt and clear up a credit report. The first step of debt relief is to take all credit cards from the consumer and destroy them. This prevents any further charging on an unaffordable budget.

The next step is to work out a payment plan with the credit card companies and other creditors to pay off all debt. A good credit repair service will negotiate lower interest and even convince the lender to waive interest in some cases. This will help you make affordable payments to actually reduce your debt. Each month you pay the credit repair service, and they in turn pay your creditors. The service takes a reasonable fee each month for their debt relief efforts out of your payment.

Once the debt is being paid, and ultimately eliminated, through regular payment plans, the credit repair service will ensure that your positive efforts are shown on your credit reports. Once a collection or debt is satisfied, the creditor should report the good news to each of the reporting agencies. However, the lenders don’t always report your good standing, and this can have a continued bad effect on one’s credit score. However, with the repair agency’s help, these reports are updated on a regular basis so that your credit score reflects the most current information.

These credit repair services can help a person manage overwhelming debt with an affordable payment plan. They will also work to ensure that the good results are reflected on your credit report. However, the downside is that a consumer does need to destroy credit cards and essentially close their credit accounts to enter a reasonable payment plan. Ultimately, it will be up to the consumer to continue good credit practices and try to re-acquire credit.

The Bad and Ugly Repair Services

Unfortunately, there are unscrupulous credit repair services that do not fulfill their promises to help a consumer. On the uglier side, there are agencies that make ridiculous promises that are completely untrue, including their ability to remove liens, bankruptcies, and judgments from a report forever. These scammers make 100% guarantees, even stating that they can provide you with a new ‘legal’ identity. Companies who make such outrageous promises are usually not out to help the consumer, but rather take advantage of desperate people by taking their money and reneging on promises to help with credit issues.

If you are looking for help in solving your credit problems, research a repair service carefully. Check with the Better Business Bureau to ensure the company is in good standing. With a good repair agency by your side, you can pay off debt and start over on a healthier credit report.

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What Can I Expect If I’m In Foreclosure?

What Can I Expect If I’m In Foreclosure?

foreclosure-lgIf you are having trouble keeping up with your mortgage payments and find yourself needing foreclosure help, you are not alone. Millions of homeowners have lost their homes due to foreclosure over the last few years. In 2008 alone, over three million foreclosures occurred in the United States. If you are in foreclosure now, what should you expect and how can you manage this stressful situation?

What is Foreclosure?

Foreclosure, also called default on a mortgage, occurs when a borrower fails to meet the terms of a mortgage secured by real estate. Usually, the first stage of default is delinquency caused by a late payment.

If a borrower continues a delinquency and fails to make the scheduled payment and subsequent payments, the mortgage company will begin the foreclosure process by filing a Notice of Default (NOD). This is a public notice filed in the home’s county recorder that describes the borrower’s default, as well as confirms the lender’s intention to foreclose on the home if the mortgage is not promptly brought up to date.

How Does the Foreclosure Process Unfold?

The process of foreclosure after the NOD is different from state to state. Some states have requirements that mortgage lenders give plenty of time for a borrower to redeem the mortgage and keep their home. This process can take up to a year and even up to two years from the beginning process of foreclosure until a defaulted homeowner is evicted and the house sold at auction. Some states, on the other hand, allow lenders to give little time for loan redemption, and the final foreclosure could occur in less than a year.

However, all homeowners in the foreclosure process can expect many letters from the lender and the lender’s attorney asking and demanding that the loan is paid, even while they are pursuing foreclosure. Once a homeowner fails to redeem their loan during the NOD timetable, the mortgage lender proceeds with asking for a judicial or non-judicial (depending on state laws) home sale and auction to recover their losses. As mentioned, a foreclosure auction sale could be months, even a year or more, after the first delinquency.

What Are Alternatives To Foreclosure?

If a homeowner truly wants to keep their home, they should talk with their lender about alternate solutions. Here are some possibilities to avoid foreclosure:

  • Loan Modification – Negotiate with the lender to change the interest rate or other terms that can effectively lower a monthly mortgage payment to a more affordable level. You will have to detail your financial statements and present a hardship case and hardship letter to your bank.  Sometimes this may require the help from a professional mortgage modification specialist company.
  • Forbearance – In some cases, a mortgage lender may be willing to issue forbearance on payments for a limited time, usually three to six months, giving the borrower time to get caught up on his finances.
  • Short Sale – If a borrower cannot financially afford the mortgage any longer, he or she may be forced to sell the home in order to pay the mortgage in full. However, what if the final selling price is less than what is owed on the mortgage? A mortgage company may agree to a “short sale,” where they accept the market price for the home and write off the balance. This is a better alternative than foreclosure for both the lender and borrower.

Foreclosure is a last resort for a homeowner who can no longer afford a mortgage. The best practice to avoid this process is to constantly keep in contact with a lender and work out an agreement that avoids the hassle, expense and defeated humility of foreclosure.

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