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Little Falls, NJ 07424

Bankruptcy – Chapter 13

Chapter 13 Bankruptcy
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Bankruptcy Chapter 13 can put you in control of whether you keep your home – not the Bank.

Bankruptcy influencers are many and not always obvious.   One of the many causes of bankruptcy filings (Chapter 13 Bankruptcy) is the inability to afford monthly mortgage payments.    Borrowers fall behind on their payments and get deeper and deeper into debt.    Chapter 13 is an excellent way  to keep your home, avoid foreclosure and spread out your mortgage arrearages.

However, looking to get the lowest possible monthly payments might not be your best option.     Over the long term of your mortgage, these smaller payments might not be best.

You never want to take on a larger monthly mortgage payment than you can afford comfortably.    This can lead to getting behind in your payments and eventually having to file bankruptcy.

Below are just a few thoughts of why the 30-year mortgage may not be best:

  • Longer mortgage pushes up home prices, by making it easier for buyers to manage a bigger loan.
  • Buyers end up paying a lot more interest over the life of the loan.
  • Principal relative to interest is very small
  • Takes a very long time to build up equity

You can still get 5-, 15-, and 20-year mortgages but you must be able to afford the  higher monthly payments.

According to the Mortgage Bankers Association, the 30-year fixed is such an integral part of  the home-buying process, it made up 88% of applications.

My goal is always to provide bankruptcy protection so that my clients keep their homes.     Foreclosures are currently at a standstill.   However, evaluating the overall effect of the mortgage and homes you buy has a significant impact on your future.    Purchasing of a home is a major investment and it should be looked at carefully with good financial analysis.

I am not suggesting that you should try to pay higher monthly payments.    This could lead to falling behind.   However, Chapter 13 bankruptcy is always an option to avoid losing your home.

Chapter 13 Bankruptcy:

If you are falling behind in your mortgage payments, call me to discuss your bankruptcy options.    Chapter 13 Bankruptcy offers so much to borrowers.    You take control with a Chapter 13 bankruptcy – not the bank.

Contact me to set up a free bankruptcy consultation.    I am here to provide you with sound legal advice and what is best for you.