The Pandemic has resulted in an unprecedented number of individuals and families struggling to deal with its resulting financial impact. From record setting unemployment numbers, closing businesses, reduction in wages/hours, mortgage defaults and increasing debt, many individuals and families are finding it difficult to dig themselves out of the financial hole that they now find themselves in.
Fortunately, at Modesto Bankruptcy Attorneys, we have been able to successfully help our clients regain financial control and get a fresh start with handling their finances. There may be no more important time to take action than now, as the everchanging environment continues to worry and stress households.
At Modesto Bankruptcy Attorneys, we have several options to assist you in handling your financial issues, which we will explore in detail below. As always, we are happy to offer you a FREE CONSULTATION to discuss your specific matter and options.
How to Handle Mounting Debt
As the Pandemic hit, many found themselves suddenly unemployed, their business closed or a reduction in their wages/hours, as businesses tried to react to the sudden emergency shutdowns. As people and businesses began to deplete their savings, many began to rely on credit cards and lines of credit to sustain their lives and keep their businesses afloat. Although this allowed many to temporarily afford their necessary household and livings expenses, as the Pandemic continued, credit cards and lines of credit began to be maxed out, and defaults were becoming more common. Many of our clients find themselves in need to get out from under their consumer debt, (ie. credit cards and bills). Fortunately for them, at Modesto Bankruptcy Attorneys, we have been successfully able to offer the following options to help:
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Debt Negotiation/Settlement: For many, filing for Bankruptcy may not be the first and preferred option. For those that find themselves behind on bills and credit card payments, our experienced attorneys have been successful in settling unpaid debts with creditors either for a reduced one-time lump sum payment, or a payment plan. This allows you to settle your debt without the need to go through Bankruptcy. At Modesto Bankruptcy Attorneys, we have been able to settle debts before and after the filing of a lawsuit by a creditor to enforce the debt owed to them. The settlement of a debt prior to a lawsuit will ensure that you are not subjected to any court proceedings, and settlement after a lawsuit has been filed will ensure that you are not responsible for resulting court and attorney’s fees on top of your debt.
For businesses that are finding it difficult to pay back their suppliers and bills, we have found that many creditors and lenders have found it favorable to negotiate settlement terms on debt and unpaid invoice/bills.
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Chapter 7 Bankruptcy: For those who debt settlement may not be the best option, filing for Chapter 7 Bankruptcy may allow for the total discharge of your existing debts. In general, Chapter 7 Bankruptcy allows for the complete discharge of consumer debts for those who qualify. If you meet the income requirements and are able to exempt your assets, you can discharge your debts and have a fresh start to your financial life. This means that there is no need to repay your creditors, and you can continue to build your financial life back without the stress of creditors and unpaid bills. For complete details filing a Chapter 7 Bankruptcy, and to see how Modesto Bankruptcy Attorneys can assist you, please click here.
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Chapter 13 Bankruptcy: For those who do not qualify for a Chapter 7 Bankruptcy and complete discharge of your debts, or for those who have certain property that they cannot exempt and wish to keep (i.e. your house or vehicles), then Chapter 13 may be an excellent option to deal with your existing debts. To briefly summarize, a Chapter 13 Bankruptcy allows for you keep your assets, and instead setup a 3 or 5-year payment plan to pay back your creditors. Depending on your situation, you may be able to pay back only some creditors, and at a reduced rate. For complete details filing a Chapter 13 Bankruptcy, and to see how Modesto Bankruptcy Attorneys can assist you, please click here.
How to Handle Your Defaulting Mortgage
Perhaps the most significant impact from the Pandemic was for those individuals and families with a mortgaged home. As layoffs and pay cuts began to increase, the household income became directly impacted. Many were forced to choose to use their savings on necessities for themselves and their families, and this meant for that for some, their mortgage was unable to be paid. Although there was mortgage assistance available to borrowers, not everyone was able to qualify, and eventually those deferred payments were going to need to be paid. Depending on what stage you are with your mortgage, at Modesto Bankruptcy Attorneys, we can provide you with several options in handling your specific situation. Below, we will discuss the most common solutions that we are able to offer our Clients who currently have a loan in default.
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Loan Modification: Once you find yourself behind on payments, you will receive a Notice Of Default from your lender. If you are unable to bring your balance current, the lender can choose to foreclose and sell the property at auction to recoup the balance of the loan. Thankfully, there are options available to keep your home. In brief, a Loan Modification is a change to the original terms of your loan with your lender. You are requesting the lender to agree to accept one or several new terms to the original agreement in order for you to remain in your home. In general, a Loan Modification will result in a decrease to your monthly payment, an increase in the length of the loan term, and rolling the defaulted balance into the end of the loan. This will allow you to have a new fixed monthly payment that you can afford. In order to qualify for a loan modification, one must submit an application to the lender and provide financial evidence as to why they can no longer afford their current payment, as well as prove what monthly payment they can afford. If the lender is satisfied, they will agree to the modification instead of pursuing a foreclose. When submitting your Loan Modification application, it is critical that it is accurately completed, and all supporting evidence is presented.
At Modesto Bankruptcy Attorneys, our experienced Attorneys have the knowledge to communicate directly with your lender on your behalf and properly submit your Loan Modification application to ensure your best chance of your modification being approved.
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Chapter 13 Bankruptcy: For those who either choose to not apply for a Loan Modification, or perhaps applied and were denied, the lender can continue their foreclosure action and force the sale of your home. Fortunately, there is still an option to save your home from foreclosure by filing for Chapter 13 Bankruptcy. Filing for Chapter 13 Bankruptcy provides you with the opportunity to enter a 3 or 5-year plan which will allow you to continue making your current mortgage payment while at the same time paying back your amount in arrears. Arrears refers to the total amount you are behind from missed payments, which legally allow the lender to foreclosure. A detailed discussion about the Chapter 13 plan can be found here. If your plan is approved, you will now make a single payment to the Chapter 13 Trustee to cover your current mortgage payment along with the arrears payment together.
At Modesto Bankruptcy Attorneys, our experienced Attorneys have successfully helped many clients keep their home through the filing of a Chapter 13 Bankruptcy, allowing them to keep their homes while they work on getting their financed back in order.
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Emergency Chapter 13 Bankruptcy Petition: It is not uncommon for a client to reach out to our firm on the last day before the scheduled auction sale date of their home. For months, you will have received legally required notices from the lender informing you of their intent to sell your home. Unfortunately, for some, they may simply ignore these notices until the last minute, and others may have exhausted all efforts to either modify their loan or reach some other agreement with their lender. Fortunately, it is still possible to stop the foreclosure last minute with the filing of an Emergency Petition. When a bankruptcy petition is filed with the court, an action known as the Automatic Stay goes into place. The Automatic Stay is meant to provide the debtor with immediate protection from creditors and prevent them from taking further action against you. In the case of a foreclosure, the lender must stop the sale date as long as the petition has been filed prior to the sale. This will allow you the opportunity to save your home through a Chapter 13 Bankruptcy. The filing of a Bankruptcy Petition requires an extensive list of supporting documentation that may take time to get together. Fortunately, for those who are taking action last minute, our Attorneys at Modesto Bankruptcy Attorneys are able to file an emergency petition on your behalf with just the bare minimum documentation required. This is referred to a Skeletal Bankruptcy. The emergency petition will allow for the immediate implementation of the Automatic Stay, which will prevent any foreclosure action, which provided you enough time to get the remainder of your documentation in to the court.
At Modesto Bankruptcy Attorneys, we have been able to file emergency bankruptcy petitions to help stop foreclosure up until just before the actual sale itself.
At Modesto Bankruptcy Attorneys, we have the experience and knowledge to assist you on regaining financial control over your life. We are happy to offer a free consultation to discuss your circumstance and detail your options. To schedule your complimentary consultation, please call our experienced Modesto bankruptcy lawyer at (209) 314-3010 or click here to schedule a time at your earliest convenience.
