People who are desperate to save their house from foreclosure may have been trying unsuccessfully to negotiate with the mortgage holder. Often, after the borrowers have fallen behind on payments, they cannot convince the lending company to modify the loan or develop an affordable payment plan to catch up. Filing for Chapter 13 with the assistance of a Bankruptcy Lawyer In Olympia WA may be the only way to force the lender’s hand.
About Chapter 13
A Chapter 13 filing results in the person having a repayment arrangement that includes all creditors allowed under the plan. This includes mortgage lenders as well as credit card companies and personal loan organizations. The individual has up to five years to pay everyone back as stated in the program. Monthly payments must be made to the trustee. Defaulting on this arrangement typically cancels the plan.
Why Choose Bankruptcy Instead of Loan Modification?
Especially during the foreclosure crisis of several years ago, banks came under harsh public opinion because of their tactics regarding loan modifications. Homeowners might work for years on attempting to be qualified for a modification, with the bank demanding more and more paperwork while repeatedly denying the adjustment to the loan. Eventually, with foreclosure imminent or already filed, they seek out a Bankruptcy Lawyer In Olympia WA for help.
Important Considerations
Under Chapter 13, the person not only has to make all the payments in the program on time but also has to stay current with the mortgage payments. It is imperative for the homeowners to consider this clearly and not just through wishful thinking. Many men and women who begin a Chapter 13 program default on it.
In fact, research indicates that two-thirds of these programs fail. The people who have filed begin with good intentions but eventually cannot keep up. Men and women who qualify for the plan have enough income to make their current payments as well as the additional ones through Chapter 13. Unfortunately, they may technically be able to pay, but they are not being realistic about the possibility of emergencies and unexpected bills. A lawyer such as Rafal Gorski can provide knowledgeable counsel on this subject.
