Economics Finance

Each client that comes into see me is unique, with their own background and reasoning for needing debt relief. Lately, I’ve had a few more come in that have attempted different options themselves without the advice of counsel including debt settlement, loan modification, and even filing bankruptcy themselves . It made me think, “Why do people choose to file themselves?” Maybe they think it will save them money. Others think that it might allow them to keep it a secret. Here are a few things to keep in mind before you try to file bankruptcy yourself.

The bankruptcy paperwork seems simple, but there are quite a few mistakes that you can make that will ruin your case. What if you leave a creditor off? The court will not fully understand your debt-and you are still responsible for paying that creditor. Unfortunately, you’ll have to pay that debt without the protection of the court which may make it impossible to pay your other payments.

Even if you are lucky enough to get papers the papers right, there are numerous issues that can come up after filing that could result in dismissal if you don’t take the correct action. Continue reading ‘A Few Things You Should Know Before Filing Bankruptcy by Yourself’ »

Before, people did not know what calculations the Banks and lenders used in order to asses and approve loan modification programs for those in danger of foreclosure. But because the trend got to an all time high, some patterns can now be seen. This is how the DTIR or the debt to income ratio has been revealed as the primary calculation that the banks used.

So what should a person’s DTIR be in order to be approved for a loan rate modification? Well, basically the optimum debt to income ration percentage is from 31 to 40 percent. What your lender basically does is compute your income versus your various daily expenses. The computed income is not net but is calculated as gross income. If it so happens that at least one third of the income a person gets monthly is spent on unavoidable expenses such as food, clothes, utilities, and mortgage payments, then your loan modification will have a high chance for approval.

In order to compute for an accurate debt to income ratio, the lender will have to get the debtor’s complete monthly budget/expenditure in an itemized format. Such entries as gas, credit card payments, medical bills, food, and others should be listed down. Current pay slips and Tax return slips will be required of the debtor in order to validate the stated income. One can usually dabble with the calculations beforehand so that a general idea can be formed of whether or not the loan modification programs application will be accepted. Continue reading ‘The Role of DTIR in Loan Modification Programs’ »

Instead of resorting to bankruptcy, many homeowners are appealing to their lenders for a home loan modification so they can continue to pay their mortgage. Some of their options are a reductions in either their interest rate, the principal balance or in monthly payments.

It is true that bankruptcy is an option for borrowers who hare having trouble paying their monthly mortgage bills. Bankruptcy does not guarantee that foreclosure will be avoided. Whenever it is possible, a loan modification is preferred over bankruptcy.

Here are some convincing reasons to choose a loan modification instead of filing for bankruptcy:

After you have started bankruptcy proceedings, you have no control over whether the bank forecloses on your home or not. Filing only stops the lender from asking you for your payments. A loan modification lets you pay off your loan over time, which means someday you may own your home forever.

Continue reading ‘Loan Modification Advantages over Bankruptcy’ »

Whenever you negotiate a new loan modification contract, it is very important that you pay attention to all the details. If you don’t understand every part of your renegotiated deal, you might find that you are paying more money in the long run.

In these trying times, many homeowners find it difficult to pay all their bills. For most of people, paying their mortgage is the most expensive and most urgent bill. Everyone needs a home, but the cost of owning one is very high, especially if you have signed an unfair contract, the end result of which is paying too much for your home for many years. The credit crisis has pressured banks to find a way to help their clients pay their mortgage without declaring bankruptcy.

Banks have begun offering mortgage loan modifications in order to maintain a steady incoming cash flow. A loan modification occurs when the borrower and lender negotiate a change in the original terms of the loan. Since this process involves returning to the contract in an effort to reduce the mortgage and the interest, the borrower should learn some of the language that banks use when writing contracts. If you are really in need of the modification you will take the time to read through the entire boring, tedious contract. Continue reading ‘Loan Modification Contracts – Why Should You Be Careful?’ »

Statistics show that divorce happens more often due to financial troubles than anything else. Sexual challenges, family issues, health issues and other areas are all less important to a healthy marriage than solid financial footing.

One of the biggest areas of stress for any couple is buying a home and keeping it. There are four major life decisions: choosing a spouse; buying a home; picking a career; and having kids. Buying a home involves incredible amounts of money, complete sacrifice on the parts of both spouses, a long term dedication and more. The process of buying a home can be traumatic, because people are taking so many factors into consideration – schools, work, neighbors, etc. After investing so much time and effort into choosing a home and putting up the money to buy it, it can be completely heartbreaking to see that home go into foreclosure. Many marriages have ended because of the strain that foreclosure has brought on the people involved. Spouses begin to question themselves and each other, all the time wondering why they find themselves in the midst of foreclosure proceedings.

Continue reading ‘Loan Modification Help Center – Can a Loan Modification Save Your Marriage’ »