Chapter 13 bankruptcy has helped many McKinney citizens save their homes when they thought all hope was lost. The benefit of a Chapter 13 bankruptcy is that even when you do not have a lump sum of money to become current on your mortgage, Chapter 13 can buy you five years (60 months) to pay back the arrears. Of course, you still have to make your regular monthly payments, but the arrears do not have to be found immediately.
Sometimes people fall on hard times. Death, divorce, loss of job, reduction in income can all be reasons that citizens are forced into debt. Unfortunately, sometimes people fall behind on their homes and are facing foreclosure or are behind on their cars and are in danger of repossession.
Facing a foreclosure can be excruciatingly painful. You may have tried a modification of your loan under the Obama Plan, or you may just have lost a job. Possibly your wife got sick and you just did not have the ability to take care of her and the house...so you made the choice you had to. Now the bank is following through with foreclosure proceedings. Many time clients come to our office and they are three months behind. They may have a house payment of $2,000 each month. That means that they are behind $6,000 and they have been told by the bank that unless they come up with that payment, the foreclosure sale will go through on the first Tuesday of the next month.
Despite an increase in the number of participants seeking assistance from the federal foreclosure prevention effort, the Home Affordable Modification Program (HAMP), borrowers continue to drop out of the program more rapidly than new participants join.
The goal of bankruptcy is to provide a fresh start to financially burdened Americans. The problem is that the struggles leading up to the decision to consult with a lawyer on bankruptcy options often cause significant stress, mental anguish and tension.
Filing for protection under the bankruptcy code can provide debtors with a great deal of relief and a fresh financial start. A Chapter 7 bankruptcy is available for debtors who pass the Means Test. Most people do actually pass the Means Texas, even in Collin County Texas. However, the Means Test is a two part test. Most high income earners fail the first part of the Means Test in Collin County and other North Texas Counties. The first part of the test compares what most families of the debtor's size make in Texas. Most people make less than families do in North Texas. However, there is a second part of the test. The second part of the test compares your housing, utilities, and transportation guidelines to what the IRS says is normal for a family of your size. Most people in Collin, Denton, Dallas, and Grayson Counties pass the second part of the Means Test.
Over the last two years, there have been promises from banks to try to modify the home loans of Americans to make it more affordable for them to remain in their home. The basic idea was that the debtor had to send in some documentation to be reviewed and then they would be advised if they qualified for the loan modification program in a few weeks.
In these times of financial hardship more and more average Americans are looking for the protection and relief found from bankruptcy. Most don't want to file; most didn't ever think they would be in this position; all are worried about their future after they file bankruptcy. They want to know how their life will change after they file. Will they now have the ability to obtain new credit, or will this be a permanent black mark on their credit history?