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FRIENDLY, AFFORDABLE AND KNOWLEDGEABLE Chapter 7 Chapter 13 Loan Modifications
Many people face serious problems with debt. One small event or emergency has the potential to create situations where these people are unable to keep up with the payments on these debts. This can create further complications with that debt and may have devastating effects on their credit ratings. Low credit ratings cause issues in many aspects of a person’s life. It can prevent them from getting further credit. It can also have an impact on getting a job or even renting a home. Fortunately, there are methods available for gaining control of one’s debt.

Bankruptcy is an option available for people to gain control of their finances. Chapter 13 Bankruptcy provides a method for restructuring debt. A repayment plan is made that provides an affordable method for people to get their debt under control. There is also Chapter 7. This option is for those with little or no income. This type provides a process to allow debtors to discharge their debt. However, applicants must pass the Bankruptcy Means Test to be eligible for a Chapter 7.
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Chapter 7 eliminates your unsecured debts. It is commonly called liquidation bankruptcy or liquidation chapter. Chapter 13 allows you to repay your creditors over a three-to-five-year period. This chapter is called a wage earner plan. In some instances, filing Chapter 7 is better than filing the alternative bankruptcy chapter option. Below is information about the advantages of filing Chapter 7 instead of Chapter 13.

Chapter 7 Advantages for Your Financial Situation

Chapter 7 bankruptcy is the fastest way to get out of debt for most Long Island residents. For example, the Chapter 7 process takes a minimum of three months to complete. The maximum amount of time to complete the process is six months. The actual time period depends on many factors such as how many cases were filed before your case and the complexity of your case. Chapter 13 takes a minimum of three years. If you have a longer repayment time, it’s five years before you can complete the bankruptcy process.

Other advantages of Chapter 7 Bankruptcy include:

1. No monthly payment plan. Chapter 13 requires a payment plan. A payment plan takes three-to-five years. Each month, you must pay the trustee presiding over your case a set payment. The monthly payment is determined at the start of your case. These monthly payments are distributed among your creditors.
How a Loan Modification May Help Reduce Your Monthly Mortgage Payments For homeowners struggling to keep up with their mortgage payments,there are programs available to help avoid foreclosure. However, because these programs are legal agreements, it is prudent for borrowers to consult a lawyer. One viable alternative to foreclosure is a loan-modification program that is an adjustment to the terms of the existing mortgage. Loan modification is designed to provide either temporary or permanent financial relief by reducing the amount of the monthly payments via a reduction in the principle, interest rate or by extending the term of the loan.

Loan-Modification Options

There are several forms of loan modification, with some being better than others. However, the lender that holds the mortgage may not provide all the available loan-modification types.

The full list of options include:

Will Filing for Chapter Bankruptcy 13 Ruin My Credit Score?

When you decide to file bankruptcy, it will be reflected on your credit report for years to come. As such, there is really no way around the brutal truth that filing will have a negative effect on your rating. If you are able to afford a repayment plan, choosing to file under Chapter 13 bankruptcy may help you recover more quickly and save your financial reputation.

Why Creditors Prefer Chapter 13 Instead of Chapter 7

It's no secret that lenders prefer Chapter 13 filing to that of Chapter 7 bankruptcy, but why exactly is this? It basically boils down to the fact that with Chapter 13, your creditors have some hope of future payment. In contrast, when you file under Chapter 7 bankruptcy, if you qualify, their chances of receiving any payment is dim.

Your Credit Score Under Chapter 7 Bankruptcy

Under Chapter 7, unsecured debts, such as medical bills and credit card companies, don't usually receive any kind of payment. This is because Chapter 7 doesn't require you to make payments to creditors or set up any kind of payment process. Instead, any owned property that cannot be protected under your state's exemption laws must be turned over to a trustee that is assigned by the court. Your trustee then sells the property for whatever they can get for it and uses the proceeds from the sale to pay off your creditors. However, most filers are able to exempt the majority, if not all, of their assets, thus keeping them out of the reach of the court. This means there is often nothing left to pay off the creditors.
For many consumers, getting a fresh start and putting past financial obligations behind them can be achieved by filing for Chapter 7 bankruptcy. Many people get so over their heads in debt that this is the only way to get out. In order to do so, they will need to work on their credit score by taking the right steps. This includes keeping all credit card balances low and paying off bills on time or even before the due date. However, it is important to realize that filing for Chapter 7 bankruptcy won’t just magically repair a credit issue overnight. It can take ten years for a bankruptcy to disappear from a credit report, depending on the exact bankruptcy chapter that was filed by a qualified attorney. Upon successfully completing your Chapter 7 bankruptcy process, our firm is happy to provide credit repair as a service to help expedite the process.

Understanding Your Credit Report

Many people are very surprised at the types of personal data a report contains. To be specific, you can expect to see these three different kinds of information:

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