Home refinancing after bankruptcy can help to ease a tight budget or it can be a financial mistake after a long road of poor or unfortunate choices.
Is Refinancing After Bankruptcy Good or Bad?
Winter Park bankruptcy and foreclosure attorneys Eric Lanigan and Roddy Lanigan work with a mortgage workout staff led by Rich Marquez to help families and individual with mortgage refinances.
Mortgage workouts–also known as mortgage refinances–can lower interest rates, eliminate debt, eliminate second and third mortgages and are sometimes done instead of or in combination with bankruptcy.
People file bankruptcy for all kinds of reasons. Some get into financial difficulty after an extended job loss, divorce, illness or a medical emergency. Others have gone through devastating loss due to natural disasters such as hurricanes, floods, or fires.
Still others just don’t seem to understand the basic principle that income has to exceed outgo. In keeping with the federal Bankruptcy Code, individuals usually file for Chapter 7 or Chapter 13 bankruptcies.
In Chapter 7 bankruptcy, the individual has few assets and all debt is typically written off. Though the individual gets relief from creditors, the financial consequences continue for a long time. A Chapter 7 bankruptcy stays on the person’s credit file for 10 years.
This can mean paying higher interest rates on car loans and home mortgages for a long time to come. Almost certainly, the interest rate on a mortgage for a home refinancing after bankruptcy will be higher than average.
The bankruptcy record may possibly affect job opportunities and automobile insurance rates as both employers and insurance companies may investigate an applicant’s credit history.
In Chapter 13 bankruptcy, the individual sets up a court-approved payment plan for paying off all obligations within a three- to five-year schedule. Obligations, such as credit card balances, may be reduced as part of the payment agreement.
A Chapter 13 bankruptcy stays on a person’s credit history for seven years. This individual may be the better candidate for a home refinancing after bankruptcy because potential creditors look more favorably on a Chapter 13 than a Chapter 7. The creditors recognize and appreciate that the person is making an effort to repay obligations rather than walking away from them.
Counseling is required while going through the bankruptcy process. Help on financial and economic issues is available through financial counseling and other resources including numerous books, through churches, non-profit organizations, and government agencies.
Work with Experienced Attorney Eric Lanigan
Select Winter Park bankruptcy or foreclosure attorneys Eric Lanigan or Roddy Lanigan and you’ll work with experienced attorneys who will explain your options in bankruptcy and the financial implications of those options. Lanigan and Lanigan clients receive representation with a personal touch.