Bankruptcy Option For Your Mortgage
Now you might think why in the world would anyone take a bankruptcy as an option when they are unable to get their loans modified in order to keep up with their house payments, or for any other reason. Well the answer is simple and obvious. There are other options available but each person’s situation can be different from the each other. You may need to choose bankruptcy over other options with respect to dealing with your mortgage.
Bankruptcy can be a life changing event, when it comes to the long term effects of it all. Bankruptcy is a desperate and a last choice step for most people. It is often used where you have reached the end of the road and are just about out of other choices. Even then, many would not dare to file a chapter 7 or 13. The stigma of bankruptcy can last for up to a decade on your credit reporting for a chapter 7, and up to 7yrs for a chapter 13 which is a repayment agreement. Anything post bankruptcy when trying to get a loan for credit is virtually impossible, you would most likely need to operate on a cash only basis for most of your future purchases. It will literally eliminate your ability to get credit, or to get any worthwhile credit in the near future. I would highly discourage the thought of bankruptcy simply because of the long term effects. Job and credit applications will have a question pertaining to bankruptcy; it will ask you if you have ever filed bankruptcy before and lying on the application is a fraud, and it is a criminal offense.
In some cases homeowners attempting to try to save their property, especially at several failed attempts for a loan modification to lower their mortgage payment, will sometimes seek the bankruptcy alternative. I would strongly disagree with that option even in the case of someone loosing their home. It seems a much easier process to just get out of the property and find cheaper means of living than to file for bankruptcy in order to keep the property, but destruct one’s own credit for many years to come. Some homeowners can understand that and take the necessary steps to avoid that option, while others choose the easy way out in an attempt to hold on to their residence. Look at the situation like this; would it make more sense for you to move in with family, friend, or move into cheaper living facilities and not file bankruptcy, than to file just to keep the property that might have a bad mortgage loan on it in the first place. Filing for such an action is more like making one of the most negative life changing event you can take, because of the lasting effects of it all. So next time you are looking for an easy way out, think twice before opting for a bankruptcy.
