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Loan Modification or Bankruptcy?

Once you get into a tough financial spot it can mean that you have to make some tough decisions to help you get it under control. Often it means that you may be getting behind on your mortgage payments. This is no doubt causing you many sleepless nights, and a great deal of stress. You start looking at your options and may be trying to decide between a loan modification or filing for bankruptcy.

Under a loan modification you may get the chance to try it for a period of time. Usually this modification includes lower payments, but it may also mean that you are paying on your home for a much longer period of time, which means more interest payments. In addition to this it can be difficult to get the mortgage lender to even consider a modification. It is faster and easier for them in some cases just to proceed with a foreclosure.

Bankruptcy may be the better option so you don't lose all the equity that you have accumulated. In many cases a loan modification can be a temporary quick fix, and before long the terms of the agreement cannot be honored because of the debt situation the individual has.

Loan modification is something that you can talk to your New Albany bankruptcy lawyer about, and this expert can explain the differences and the potential benefits that bankruptcy can offer that the loan modification can't. A Chapter 13 bankruptcy is still going to allow you to make payments, but these will be structured as to what your disposable income consists of. Plus you are protected from legal action.

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