Taking a second mortgage out on your house to pay off credit card debt is a bad idea in most cases. In the event you need to file bankruptcy, credit card debt can be wiped out if necessary. Even in a Chapter 13 /a> plan where you are paying back all of your debt, the interest rate paid on credit card debt is zero. In contrast, the most common way to get rid of your second mortgage in a Chapter 13 /a> or a Chapter 7 is to surrrender the house to your creditor. To keep the house, all payments must be made on the second mortgage. Why would you ever want to exchange a type of debt that can be wiped out or paid back at zero percent interest for a new type of debt that must be paid back with interest and could result in the loss of your house if you ever get into a position where you can’t make the payment?
Borrowing against your 401k is a terrible idea. With Georgia Bankruptcy Exemptions, your 401k most likely will be 100 percent protected from your creditors.
One of the most common mistakes I see people make is that they will borrow against their 401K to pay off credit card debt or medical debt. Within a short period of time, they realize that they are not going to be able to make the 401k loan payment. Trying to get by, they skip other important bills like car payments and house payments. Then, they come to my office to file Chapter 13 to save the house and car. The reason I feel so bad for these people is because we could have wiped out the credit card debt and the medical debt in a Chapter 13 /a> or a Chapter 7 but now we are stuck with this 401k payment that they cannot afford.
Defaulting on the 401k loan is a bad idea because of the tax penalties. When a person defaults on a 401k loan, they will have to pay the government taxes that they otherwise could have completely avoided if they had never taken out the 401k loan to begin with.
Your 401k is meant for your retirement. Don’t ever treat it like an emergency fund.
If you miss a few mortgage payments while you are in Chapter 13 /a> in the Northern District of Georgia, the attorneys for the mortgage company will file a Motion for Relief against you. They will charge you approximately $800 for filing this motion. Generally, we can work out a deal with them to put their attorney fees into your Chapter 13 /a> plan and spread out the missed payments over six months. If this is not feasible, the motion will be granted and your house will be foreclosed. Call me if you have any questions.
In my opinion, this is a bad idea. If you are able to make your mortgage payments, do so. I recently spoke with a person who quit making mortgage payments so that his mortgage company would consider him for a loan modification. They filled out all the papers as requested by the bank for the modification. After about four months of not receiving any payments, the bank started foreclosure proceedings. The debtors never opened their mail from the foreclosure attorney and ignored a certified letter that was sent to their residence. As a result, there house was foreclosed and there is nothing they can do to get it back. Chapter 13 /a> does not lower your future mortgage payment but it can wipe out credit card debt to make is easier to pay the mortgage.
The answer to this question is that it depends on your mortgage company. Here is what the mortgage company must do in Georgia to foreclose on your house. First, they must advertise your house for four weeks prior to the foreclosure date. Normally, foreclosures are conducted the first Tuesday of each month. Holidays can mess up this general rule. Second, the mortgage company is required to send you notification of the foreclosure You should have at least four weeks notice of the foreclosure date. Notice to you is generally accomplished by sending you a certified letter. Chapter 13 /a> can stop the foreclosure and save your house. Call me today at 1-888-832-8249 for your free consultation.
If you have fallen behind on your mortgage payments, Chapter 13 /a> can save your house. Here is how it works. We take all of the past due mortgage payments and put them into your Chapter 13 plan. Most Chapter 13 /a> plans run for three to five years. If we need to, we can wipe out credit card debt and medical debt in your Chapter 13 /a> plan. Making your mortgage payments will be much easier once we remove the burden of credit card and medical debt. Call me today for your free consultation at 1-888-832-8249.
The answer to this question is maybe. If you have a foreclosure scheduled against you, you should file Chapter 13 to stop the foreclosure and save your home. I have had so many clients where someone from the mortgage company called and told the homeowner that they would try to work something out to stop the foreclosure Nothing got worked out, and they lost their home. Ask yourself this question, “If the mortgage is willing to work with me, why did they file the foreclosure action against me in the first place?” If your mortgage company says they are going to call off the foreclosure, GET IT IN WRITING before the foreclosure date. If you are considering Chapter 13 to the stop the foreclosure, call me today at 888-832-8249 for your free consultation. We need time to get your paperwork prepared. Don’t wait until the last second.
If someone tells you to pay them money so that they can “renegotiate your loan,” don’t do it! There are so many scams. Speak to your mortgage company directly. You don’t need to pay anyone to help you with any type of loan modification. Go to the Federal Trade Commission website and read all about the foreclosure scams. Call the FTC at 888-HOPE-NOW.
If you would like to learn how Chapter 13 /a> can stop the foreclosure of your home, call me today at 706-295-0030.
Yes. If you file Chapter 13 /a> and are able to continue to make regular monthly mortgage payments, your house cannot be foreclosed on while you are in Chapter 13 /a>. The important question is, “Can you afford your future payments?” If so, Chapter 13 /a> is a great option for you. Any past due payments on your mortgage can be put into your Chapter 13 /a> plan. Call me today at 888-832-8249 for your free consultation.
In my experience, I have seen many clients who have been forced to file either Chapter 13 or Chapter 7 because of a recent divorce. When the household income is cut in half but the household expenses remain the same, paying credit card debt is impossible.
A common post-divorce example is that each spouse is ordered by a divorce judge to pay half of all joint debts. When one person gets into a situation where they can’t pay, the other person often hauls them back into divorce court for a contempt proceeding for not paying the joint debt. Usually the cause of one spouse not paying is a loss of job or new expenses from a new marriage/new family. Contempt proceedings in divorce court may get the nonpaying ex-spouse to come up with funds to avoid going to jail in the short term but the underlying situation does not change. Whatever the cause, the nonpaying ex-spouse cannot pay. This cycle continues until the person who has been paying their side of the debts can no longer afford to pay an attorney to keep hauling the other person into divorce court. After thousands of dollars and heartache, both end up filing bankruptcy.
Couples who are under financial strain should consider bankruptcy before the divorce. It does not cost anything to meet with me and let me analyze your situation. Perhaps the removal of the financial strain might save the marriage?