Not so long ago we had a middle-aged woman visit our office. Her husband recently lost his job and couldn’t find another. They were financially strapped. She was pondering the idea of going out and getting a second job herself so that they could pay their bills, or she wondered if there were another solution.

In talking to some of her friends bankruptcy was brought up as a possible solution but she couldn’t get past the moral or social stigma that it brought with it. They had always paid their bills on time before he was let go. They felt that they were a responsible couple who just were going through a tough time.

She showed up in our office with many concerns about filing a chapter 7 or chapter 13 bankruptcy. Would the records of the bankruptcy be easly accessed? Could this hurt them in finding future employment? What about the social implications? I told her that most employers wouldn’t even ask that kind of information from employment candidates. I answered all of her questions patiently and provided her the information she needed to make an informed decision. I told her about the many famous individuals through history that had filed bankruptcy, including Henry Ford, Donald Trump, Thomas Jefferson, and Walt Disney to name a few. Although she wasn’t ready just yet she was able to go home think things through and talk them over with her husband. Within a couple of days she called our office. She had talked it over with her husband and they were going to file. They had come to grips with the prospect of filing and were now free from fear or worry. They knew that this was going to be a new beginning for them, not a social disaster as they had first thought.

This story isn’t an isolated incident. We have many people who contact our offices and are very concerned about filing bankruptcy. They wonder if it’s morally right. They have always paid their debts and feel guilty to not repay their debtors. Sometimes bankruptcy can be a very emotional decision, that won’t go away. But through research and some conversation there can be clarity brought to the situation. So that an informed decision can be made. Bankruptcy is a tool designed to help people who may be in that tough situation. It can offer a fresh start for those that may be in some sort of financial hardship. Whether that is through credit card debt, medical bills, home foreclosure, etc.

 Yes credit counseling is another option that some may seek. But credit counseling could end up being more damaging to your credit. When you enter credit counseling you are probably already not able to make your monthly payments. With each month that goes by that you don’t make a payment your credit scores go down. Where if you file bankruptcy your debt may be discharged within four months allowing you a new start. With each client, I have found that once I am able to sit down and talk to them, addressing each issue and offering more information, they are able to move forward with a new, educated perspective. If a person meets the right requirements and has become educated about filing bankruptcy they can make an informed decision about it. Leaving the social stigmas behind and making a fresh start.

Are you delinquent on your home loan? Have you fallen behind on your monthly mortgage payment? What about your adjustable rate mortgage? Is it still affordable? If any of these pertain to you then you are not alone. Millions of people default on their mortgage every year. But there are ways to prevent foreclosure. First and foremost, don’t be afraid to ask for help. Here are some tips that may help you avoid foreclosure.

• Contact your lender
  • Many times your bank or financial institution will work with you to find reasonable arrangements with borrowers rather than foreclosing on the loans immediately. Act early and let your lender know that you are having financial difficulties but you are wanting to work with them. Don’t wait  too long or ignore the letters that they send you. You just might wait too long and they will start the foreclosure before you have time to act.
• Avoid Foreclosure Scams
  • It’s sad but there are some out there that want to take advantage of your situation. Be careful of companies that promise to save your home. They may just be after the equity you have built up in your home. Here are some examples of what to look out for.
    • The foreclosure prevention specialist: Not a specialist at all but more of a phony counselor who charges hefty fees in exchange for making a few phone calls or completing some paperwork that a homeowner could easily do for himself. There are HUD approved counselors available. Check out their website for more information.
    • The lease/buy back:  They will try to deceive you into signing over the deed to your home to a scam artist who tells you that you will be able to remain in the house as a renter and eventually buy it back. Usually, the terms of this scheme are so demanding that the buy-back becomes impossible, you get evicted, and the “rescuer” walks off with most or all of the equity.
    • The bait-and-switch: Be very aware of what you are signing. Here the scammer will make the  Homeowners think they are signing documents to bring the mortgage current. Instead, they are signing over the deed to their home. Homeowners usually don’t know they’ve been scammed until they get an eviction notice.
• Contact a HUD Approved Housing Counselor
  • The U.S. Department of Housing and Urban Development (HUD) maintains a list of approved housing counselors who give advice for free or at a low cost.  To find a HUD-approved counselor in your area call  1-800-569-4287  1-800-569-4287 or online to view the HUD Approved Housing Counseling Agencies in Florida.
  • Homeowner’s HOPE, a service of the nonprofit Homeownership Preservation Foundation, and NeighborWorks America, a national nonprofit organization, have established a toll-free hotline to help homeowners avoid foreclosure by providing free advice and support. Callers can receive immediate free counseling from nonprofit, HUD-certified organizations 24 hours a day, 7 days a week.
    Phone:   1-888-995-HOPE  1-888-995-HOPE (4673)
• NACA Home Save Program: The Neighborhood Assistance Corporation of America is a great organization that has helped many with getting their loans refinanced. Check out their Ten Step program for getting your home refinanced.

There are MANY other programs out there the assist you in saving your home. There are programs for veterans, low income earners, and emergency assistance programs for those that have fallen on hard times. Call some of the above mentioned programs for more information or do some research online.

Many times foreclosure may be inevitable and your only way out of it could be to file bankruptcy. In a chapter 13 bankruptcy you will work out a payment plan to help you get caught up and you could also discharge other debts.  If you would like to speak to an Attorney about how then call Jill or Steve at (727)231-4300 to set up an appointment You can also visit our website at JillMcDonald.com.

Amassed credit card debt and a mortgage is enough to drive many to bankruptcy, especially after a life event such as the loss of a job or the passing on of a partner. Throw in a second mortgage and the financial troubles get even worse.  Usually what is necessary in this situation is to modify the first mortgage, a small offering to the credit card companies and avoid the second mortgage altogether.

One approach that has recently been used is to combine a chapter 13 bankruptcy with a federal government program known as HAMP (The Home Affordable Modification Program) to modify the first mortgage. Once that is done then you may be able to strip off the second mortgage if it is deemed “underwater” and then there would be an offer of a small dividend to the credit card companies.

To speak to an experienced attorney about bankruptcy and how it could help you contact Jill or Steve at The Law Offices of Jill McDonald. Give us a call at (727)-231-4300