After watching the close of the stock market today I have come to the conclusion that many Americans will be filing bankruptcy in the near future. It seems that by the time most people retire their pensions will be nonexistent. Cities these days are having trouble meeting their payroll because of the huge pension obligations. Most government municipalities, whether it's local, state or federal are on some kind of defined benefit retirement program. This means when they retire they will receive a percentage of their highest salary. When the market goes down the municipality is responsible to make up the difference to fund the pension. This is a win-win for the employees and a lose-lose for the taxpayers. Many people's 401(k)s getting wiped out, individuals will have to consider going back to work to make ends meet. Since the downgrade of the US government last week many economists believe that the US economy is bankrupt because of its poor spending habits. This is not good news for Americans, as many rely on Social Security, Medicare and many other entitlement programs. All it would take is to get a reduction in these government payments and these individuals will have no other option but to file for bankruptcy.
In this volatile economy, filing bankruptcy might be the best way out of debt. You see corporations and businesses filing bankruptcy to re-organize every day with little or no repercussions. Many of them believe a bankruptcy filing being leaner and meaner than before. If filing bankruptcy is good enough for large corporations, it should be good enough for you.
When deciding to file for bankruptcy as an individual should first speak with a bankruptcy attorney in their area to go over their personal situation. The bankruptcy attorney should be able to tell if the debtor is qualified to file Chapter 7 bankruptcy or if for their circumstances it would be best to be put in a Chapter 13 bankruptcy. A Chapter 7 bankruptcy is usually best for an individual who carries a large amount of unsecured debts like credit cards, while a Chapter 13 shows its benefits by protecting property. Both types of bankruptcy filing have many benefits when used with a help of a bankruptcy attorney. If you're in debt and don't know what to do, don't fret, contact a bankruptcy attorney and see what filing for bankruptcy has offer you.
During the heyday of the mortgage boom, individuals submitted applications for loans to be able to purchase property, either as a home or a business. The security for the loan provided is the property purchased, so during the term of the loan, the borrower lives on the property and pays off the loan in monthly amortizations.
Because of the recent recession, many lost their jobs making them without the proper income to pay for the amortization. When a borrower fails to pay on time or pays at all, then a default on mortgage happens and this can result in foreclosure. There are many other results when an individual fails to pay their monthly amortization.
The following are the recommended steps when an individual with a mortgage fails to pay their monthly amortization.
Notify the Creditor. If there is sudden change in the income stream for an individual with a mortgage, the first step to take is inform the creditor of the situation. At this point, to avoid further costs and to ensure continued income, the creditor would certainly seek to find out ways and means to accommodate the current financial situation.
Negotiate the Terms. Once there is a connection, the next step is to renegotiate the terms of the mortgage. One option would be to use the add-on option of putting penalty amounts for late payment amortizations without canceling the mortgage. Another choice would be suggesting a lower interest rate but extending the term of the mortgage. Essentially, it would be modifying the terms of the loan through renegotiation of the payment terms of the amortization.
Selling the Property. Another option is to sell the property or put it up for sale in the market. It is imperative though that the existence of the mortgage should be communicated to the buyer, including the problems associated with unpaid amortizations. This information should help the owner be relieved of the burden of paying for the mortgage, have money to pay off the defaulted amortizations and be credit free until the next loan is taken.
Asking a Lawyer. If there is a pervasive inability to pay all existing obligations, then the next best option would be filing for bankruptcy. Bankruptcy is the legal procedure wherein there is a declaration of inability to fulfill contracted obligations, such as payment of debt and through assets accumulated, a plan for payment would be formulated. Under this option, under the guidance of the lawyer, the mortgaged home would be protected but the loan is still subsisting and payment would be demanded in the long run. In seeking the guidance of a lawyer, the mortgage can be managed properly depending upon the ability to pay the said amount.
As can be seen, when an individual with a mortgage defaults on payment of amortizations, there are still ways to be able to prevent the foreclosure sign to be planted on your front yard. One can coordinate with the creditor, renegotiate the loan, sell the property outright or even file for bankruptcy. When choosing any of the above options, the individual can be assured that the loan would be properly managed for the long run.
