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Cant decide which to do,a bankruptcy or a mortgage modification?
Anonymous3 views3 answers
We are a household of one income for almost two years now. My husband is unemployed. We have a mortgage payment that is more that what i bring home and have fallen behind one month. We have two teenagers and 8 year old still in the house. The cost of living has turned our household expense upside down. The job market is not able to provide my husband with one that is comparable to what he was once paid, not for the lack of trying. Our mortgage company has not given us a modification due to unemployment(not a steady source of income). Which do we do? We want to save our home, and the two cars we have, but also want to live comfortably? Which one will we qualify for? Even if we get to keep our home, how can we get our mortage down to reasonable ratio to our income so we can continue
Mortgage modification, unfortunately, does not allow you to keep your home if you can't afford to do so. It is a temporary reprieve for people experiencing a temporary hardship.
I have posted a 4 part series explaining the calculations for finding out if you are likely to qualify for a mortgage modification at the links below.
Hope this perspective helps!
There are all sorts of modifications. I have had some clients who have gotten permanent reprieve and the rules have recently changed. The issue is that you need regular income or one will not work.
Time for a reality check. Without the income, you cannot afford the house, two cars and a comfortable living. If you have income, you need to do some belt tightening and you can try for a loan modification. If it doesn't happen, and they are rare, you need to be prepared for Plan B.
Talk to a local bankruptcy and consumer attorney about the alternatives. Whatever you do, do not pay someone money you do not have to try for a modification.
Doing a mortgage modification is not up to you, it requires the bank's consent which so far has not been given. You do have a right to bankruptcy without the bank's consent. You should also be aware that you can do both! Many people use bankruptcy to forgive as many debts as possible in an effort to show their mortgage company that now they can afford the house. Note: bankruptcy can't lower the payment on your first loan.
