The recent economic recession has forced many people to turn to bankruptcy lawyers to find ways of keeping afloat. Spikes in interest rates coupled with rising consumer prices, and the resulting decline in spending has left many individuals and businesses, with heavy financial burdens they find increasingly difficult to cope with. Loans that were once affordable a few years ago have become unsustainable today. Bankruptcy is not something one plans for, but is rather forced to do so as to attain some relief. Bankruptcy is usually a last resort. Just because you are suffering under the weight of heavy loan installments does not mean that this is the only solution to your problem. In recent years, many lending institutions have been forced to foreclose on homes and businesses of their defaulting borrowers. More often than not, they have been unable to recover even the principal outstanding by selling those properties. A bankruptcy lawyer should be in a position to help access your situation and see if there are alternative routes you can take.
The biggest problem in sorting out an impending personal financial crisis is the inability to face facts. Many people who now face bankruptcy would have been able to work out better repayment plans had they taken initiative early on. Loan modification is a viable solution, and in many cases, borrowers find that in the initial months of their default, lending institutions send out documents recommending new repayment plans. Unfortunately, many borrowers fear facing the reality of their situation and allow the problem to escalate to unmanageable proportions. For others, the new repayment plans work for only a short duration before putting them back in the dire position they were in initially. Before filing for bankruptcy, consult your attorney and try to work out a repayment plan that will work for you.
There are many government programs that you may be able to qualify for that will see your loan payments drastically reduced without having your credit score suffer adversely. Some programs allow borrowers who have been facing financial hardship to get interest rates reduced. For homeowners whose property values declined steeply, there are programs that can see the principal value of their loans recalculated to reflect the current market value of their homes. Some, who have become jobless recently, can apply for a suspension of loan payments for a period of over a year as they seek new employment. Others, who feel they can no longer hold on to high value properties, can even be assisted to take up new mortgages on more affordable housing and get financial assistance to help in covering moving expenses. Every program comes with its own eligibility criteria so consult your bankruptcy lawyer to find out whether you qualify for such assistance.
As earlier mentioned, many lenders are being faced with the harsh reality that even foreclosing on their clients does not guarantee that they will be able to recover all their money. They have come to support loan modification programs and can be receptive to listening and trying to help struggling clients restructure their loan facilities. Even in cases where bankruptcy has been filed, you may be compelled to arrange for a repayment plan anyway. Have an open mind as you visit a bankruptcy lawyer to get assistance on tackling crippling debt. You may be able to work out a mutually beneficial arrangement that will see you repay your debt and reduce the cost of litigation.