How Can I Cure a Delinquent Mortgage?

When dealing with a delinquent mortgage, you need to investigate the options that are available to you. Your goal is likely to find a way to cure the delinquency and bring the mortgage current. If this is your aim, Chapter 7 bankruptcy or Chapter 13 bankruptcy may be the best plan of action for you. In accordance with the U.S. Bankruptcy Code, you can file for bankruptcy to cure a delinquent mortgage and legally protect yourself from foreclosure.

The first step is to find out which Chapter of bankruptcy is best for your financial situation. Chapter 13 helps you to contrive a repayment plan, while Chapter 7 discharges most, or even all, of your debts. When you file for either of these bankruptcy Chapters, you will notate that you intend to cure your delinquent mortgage through a reaffirmation agreement with your mortgage lender during the bankruptcy proceedings.
Contact your mortgage lender in writing and let them know you intend to reaffirm your mortgage loan through bankruptcy proceedings. When you reaffirm a loan, you retain possession and ownership of the home/property and the mortgage loan is adjusted to reflect a current status, and you make an agreement to keep the account current in the future.

The mortgage lender can prepare a reaffirmation agreement, or you can acquire one from the bankruptcy court trustee. It is very important to follow the terms of your reaffirmation agreement and keep the mortgage current and make your future payments in a timely fashion. Don't ever forget to consult with a bankruptcy attorney before making any decisions. If you own a business or reside in the State of Connecticut, be sure to contact a Connecticut Law Firm that specializes in bankruptcy.
Richard Croce - Rich@rrc-llc.com

Chapter 7 Means Test

The Chapter 7 “means test” determines whether you are eligible to file Chapter 7 Bankruptcy. The means test is a formula that is designed to stop people with high income levels and/or low monthly expenses from filing Chapter 7 bankruptcy.  The test was designed to ensure that Chapter 7 is only used by people who are truly unable to repay their debts.

Before taking the means test, you can determine if your income is less than the median income for your household size in your state. If your income is lower than the median income level, you are eligible for Chapter 7 bankruptcy and do not have to take the means test. If your income is higher than the median income level, you have to take the means test to see if you are eligible to file Chapter 7 bankruptcy.

The basic formula for the means test involves deducting specific monthly expenses from your average income for the six months preceding your bankruptcy. This formula will determine your monthly “disposable” income. If you have a high amount of disposable income, you are unlikely to be eligible for Chapter 7 bankruptcy. Filers with higher income, and who fail the means test, may be eligible for Chapter 13 to repay part f other debts, but are not eligible for Chapter 7 which completely eliminates debt altogether.

You can find online versions of the means test to see if you may be eligible for Chapter 7. These tests may not always be accurate, and should not be substituted for legal advice from a bankruptcy attorney.
Richard Croce - Rich@rrc-llc.com

Unsecured Credit Cards for Rebuilding Credit after Bankruptcy

You truly can have excellent credit again after a bankruptcy. You can have a credit score of 750 even before the bankruptcy mark falls off your credit report if you begin working hard on your credit score immediately after your bankruptcy proceedings are over. Once you receive the discharge notice from bankruptcy court, you can show this discharge paperwork to creditors and you may be offered new credit lines.

After filing for bankruptcy, you will likely start to receive numerous credit card offers. Some will be unsecured, which means you do not have to give the lending institution any money in order to open the credit card. When opening a new credit card, the higher the limit, the better it can be for your credit score (or worse, if you fail to keep the balance low). 

As with secured credit cards, you must be careful of upfront fees and also find out if the lender will report your credit card activity to all three major credit bureaus - Experian, Equifax and TransUnion.

With an unsecured credit card, you should be able to request and receive a credit line increase every 12 months. 

Also, you should try to avoid carrying a balance on your cards. The fastest way to improve your credit score is to only use the card if you can pay it off in full each month or within a few months. It's always great to speak o an experienced attorney who understands the pros and cons.

Richard Croce - Rich@rrc-llc.com