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WHAT DOES IT MEAN TO REAFFIRM YOUR MORTGAGE IN A BANKRUPTCY?

While bankruptcy can help you get rid of your debt in general, you may want to recommit to the terms of your mortgage. People who can can afford to pay the mortgage and want to keep the home may choose to reaffirm.  The promise to repay a mortgage after bankruptcy is known as reaffirming the  debt. Whether you want to take this step depends on your circumstances and the type of bankruptcy you file.

A “reaffirmation agreement” is a legal contract that states your promise to repay all or a portion of your debt which might have otherwise been released in a bankruptcy case.

WHY REAFFIRM YOUR MORTGAGE DEBT

If you are current on your loan payment and able to make future payments, reaffirming informs the lender that you intend to pay the mortgage.  This allows you keep your home during bankruptcy as long as you abide by the terms of the reaffirmation agreement and make payments.  When you reaffirm your debt this payment will be reported on your credit report and help rebuild your credit.

 SHOULD YOU REAFFIRM?

Each situation is unique and differs based on your payment history and your ability to pay in the future.  If you are able to make your mortgage payment, reaffirming may help ensure the mortgage company reports your payments to the credit reporting agencies.

However, if financial difficulties prevent you from making this commitment and you want to be released from your mortgage in bankruptcy, you should not sign a reaffirmation agreement.

MORE INFORMATION

If you are struggling financially bankruptcy may be your best option.  Contact Keegan & Company Attorneys to schedule a free consultation to discuss your unique situation with an experienced attorney.

Debt Consolidation, Debt Management, Debt Settlement vs. Bankruptcy- Which Way is Best?

 

Are you struggling with debt?  Many Americans struggle with debt every year. Looking for the best way out of debt can be exhausting and time consuming.  The most common ways out of debt are debt consolidation, debt management, debt settlement, do it yourself, and bankruptcy. As to debt consolidation, management and settlement companies, be careful, there are many unreliable and even predatory companies that will take advantage of you. We advise you to consult with a knowledgeable attorney before you decide.

DEBT CONSOLIDATION

Debt consolidation may mean getting a new loan to pay off your existing debts. The term “consolidate” means to group several things together into one. Doing this may lower your monthly payment and interest rate.

The problem with debt consolidation is you have not reduced your amount of debt, you have simply lumped all of your debt into one loan with one payment.  You are still accruing interest on your high balance and it may take years to pay off this loan.

 

DEBT MANAGEMENT

A debt management plan is a program offered by companies or non-profit groups that say they will help you negotiate a new payment plan with your current creditors.  The debt management company may negotiate your debts with your creditors and you will make a monthly payment to them directly on your behalf.

There are several problems with these debt management plans. Unfortunately, not all of these companies are honest about what they are selling and how they distribute your funds.  We have had many clients tell us that they paid one of these companies for years without ever seeing their balances go down.

 

DEBT SETTLEMENT

Debt settlement occurs when you work directly with your creditors for lower payments or amounts due. Usually, you must have that full amount to immediately pay. This can be good if you have the funds to pay.

Even if you do have the funds for debt settlement, not all creditors will work with you.  Creditors who do reduce your debt will send you a 1099 tax form and the forgiven amount is treated as income to you.  You will likely owe the IRS a part of the savings of debt settlement.

 

DO IT ON YOUR OWN

If you don’t have much debt and can tighten up on your expenses for a short period of time then this can work.  Start by paying extra on your high interest debt while paying minimum on other debts. When that debt is paid off then snowball the funds into the next highest interest debt.  This is not an option if you can only make minimum payments.

 

BANKRUPTCY IS OFTEN THE BEST OPTION

There are hundreds of thousands of bankruptcies filed in the US each year.  Most are filed by families.

Bankruptcy is often the fastest and easiest way out of debt.  Creditors can refuse to participate in consolidation and debt management cases but they cannot refuse to participate in a bankruptcy. Bankruptcy filing will stay on your credit report for up to 10 years, but all of the options above will affect you for about the same amount of time.  The key to credit after bankruptcy is paying all your debts on time, and careful consideration of any future debt. You will be able to get new credit rather quickly if that is what you desire and can afford. Under federal bankruptcy protection you can protect your assets and wipe out your debts.  There are no negative tax implications for discharging debt in bankruptcy.

MORE INFORMATION

Call 513-752-3900 today for your free consultation with an experienced attorney and then decide for yourself if bankruptcy is your best way out of debt. Keegan & Company Attorneys is located in Eastgate and Middletown, Ohio. Since 1992, our experienced lawyers have helped people protect their hard earned assets and wages and obtain relief from overwhelming debt. Our office helps consumers get financial relief through the use of Bankruptcy.

Bankruptcy -Protect Your Hard Earned Assets AND Eliminate Overwhelming Debt

Since 1992, our office has helped thousands of people protect their assets and eliminate overwhelming debt. Job loss, divorce, a medical emergency or other catastrophic events are usually why people see us.  Millions of people have used the U.S. bankruptcy laws to get a fresh start.  There are several myths about bankruptcy.

I WILL HAVE TO GIVE UP MY HOUSE AND CAR

The bankruptcy law provides for generous exemptions. Everyday, our clients use legal exemptions to protect their home and vehicles. Sit down with one of our attorneys to learn how your assets can be protected.

BANKRUPTCY WILL RUIN MY CREDIT FOREVER

Bankruptcy stays on your credit report for up to 10 years, but once the slate is clean after bankruptcy, you can start to rebuild your credit. In fact, many people enjoy stronger credit scores after filing. Bankruptcy clears debt and gives a fresh financial start. You are a better credit risk to many creditors after bankruptcy with your unsecured debts eliminated. You will be surprised at the amount of credit card offers you will receive after your bankruptcy filing.  Creditors are willing to extend credit because they know you are debt free and cannot file again for some time.  Keep in mind these offers will initially have high interest and fees. We recommend that you consider your budget, long term goals and needs carefully before taking on any new debt. Bankruptcy has helped millions of Americans get out of debt and bankruptcy can help you too.

BANKRUPTCY IS EXPENSIVE

Many people believe that bankruptcy will be too expensive.  Bankruptcy is not free, but the fee is small compared to the amount of debt you will be discharging.

MORE INFORMATION

The office of Keegan & Company Attorneys offers a free consultation with an experienced attorney and discuss your unique situation. Our attorneys will go over all of your options and quote you a fee.  Our offices are conveniently located in Eastgate and Middletown, Ohio.  Call 513-752-3900 to set up your free consultation appointment.

 

Will I Lose My Home in Bankruptcy?

 

Home ownership is part of the American Dream.  So, what happens when you achieve this dream and run into financial difficulty? In most cases you can keep your home even if you decide to file for personal bankruptcy.

CHAPTER 7 BANKRUPTCY AND YOUR HOME

Chapter 7 bankruptcy also referred to as straight bankruptcy or liquidation bankruptcy is a process to discharge your unsecured debts. Thankfully, in Ohio there is a large homestead exemption.  As long as your equity in your home does not exceed this exemption the bankruptcy court cannot sell your home. As of 2023, this exemption is approximately $145,000 per individual and $290,000 per couple. To keep your home in Chapter 7 you should be current on your house payments. As long as you are current and do not have equity beyond the exemption amount you will be able to keep your home.   If you wish to keep your home you will typically sign a reaffirmation agreement. This document makes your mortgage non-discharged and your mortgage holder will continue to report your payments to the credit reporting agencies.

CHAPTER 13 BANKRUPTCY AND YOUR HOME

If you have too much equity in your home or are behind on your mortgage payments you can save your home through a Chapter 13.  A Chapter 13 bankruptcy is a repayment plan.  If your home is in foreclosure you can file Chapter 13 up to the moment the sheriff auctions your home. You will then make your regular house payment and your arrears payment through the Chapter 13 Trustee. Once you complete your case you will be current on your home and will then make your payment directly to your lender.

MORE INFORMATION

Call 513-752-3900 to schedule a free consultation. We will give you plenty of time to discuss your individual circumstance with an experienced bankruptcy lawyer.   We offer fair fees, payment plans, easy parking and two convenient locations: Eastgate, Clermont County & Middletown, Ohio. Since 1992, Keegan & Company Attorneys has helped thousands of your neighbors protect assets and gain financial peace of mind.