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Long Island Bankruptcy Law Blog

What you should know about home loan modifications

At the law office of Macco & Stern, LLP, we understand the frustration and anguish New York residents feel if they are facing a foreclosure. It can be worrisome if you are informed you might soon lose your home, and you are trying to do everything you can to ease your financial burden and keep your house.

If your home is soon to go into foreclosure or you filed for Chapter 13 bankruptcy, you might have received offers to apply for a home loan modification. As U.S. News & World Report explains, the purpose of a loan modification is to lower your monthly payments, which can help you catch up on or stay current with your mortgage payments. Lowering your monthly mortgage payment may also make it easier to pay the rest of your bills.

Moving past a bankruptcy

Before you file for bankruptcy in New York, you might want to investigate and plan how you will use the experience to make your financial future more secure. This is actually exactly what bankruptcy is set up to do - to allow consumers to break free of debt that holds them back so they can make a true fresh start. It may take some time to climb the ladder to the top of the credit ratings but the amount of time involved may be far less than you may fear if you take the right steps.

NerdWallet explains that if you file a Chapter 7 bankruptcy, you will get some relief in terms of your credit score almost instantly because your debt-to-income ratio will improve once your debts have been discharged. Also, bad marks on your credit report about late or missed payments will get older and their impact will lessen.

What should you know about home equity?

As a resident of New York who owns property, the term "home equity" has likely come up multiple times. Understanding home equity and how to use it is a crucial part of owning a home. Macco & Stern, LLP, are here to help you learn about these points of key importance.

The first thing to understand is that home equity is essentially the part of your house that you actually own. You start with the property's market value, and then subtract your outstanding loan balance from that. The remainder left would be money that's entirely yours, as it won't have to go toward paying off your current house loan.

Difference between debt relief companies and bankruptcy

Desperate debtors often grasp at straws in order to get out from under massive piles of bills they can no longer afford to pay. While that may be understandable, it might not be the most prudent course of action to take.

Debt relief companies target consumers who are struggling to repay their debts. While there are legitimate companies out there designed to help consumers regain control of their finances, there are also plenty of others that do not serve the debtors' best interests.

What situations can lead to bankruptcy?

As a New York resident who is facing unexpected money troubles, you're well-aware of just how quickly a person's financial situation can change. Macco & Stern, LLP, is here to help you as you face your financial situation and work to right it.

Work-related situations are a very common reason that people suffer from financial troubles and have to file for bankruptcy. Not only could pay cuts happen without warning, but you're likely also an at-will employee. What does that mean? Essentially, your employer can fire you for any reason they see fit, or even no reason at all. Taking legal action if you've been fired by an employer can be difficult in these situations and leave you floundering without income.

How can you negotiate debt reduction?

As a New York resident struggling with debt, you have a number of different options available to help you back out of it. Though bankruptcy is one possibility, did you know that it may also be possible to negotiate with your creditors to get your debt reduced instead?

FindLaw goes into detail on debt settlement and negotiation, which can be a tricky field to navigate for those who don't know what they're doing. It's also not without some risk, because there are numerous fraudulent debt negotiation programs out there aiming to trick you into parting with your money and damaging your credit even further.

How can you avoid credit card debt?

As a resident of New York who has struggled with credit card debt, you know that one of the best things you can do is to prevent yourself from falling back into debt once you're out. With the right tools, you can create and maintain the habits you need to make that happen.

FindLaw provides a close look at what you should and shouldn't do in order to avoid falling back into credit card debt. You should be doing things like:

  • Paying the balance in full every month to avoid interest
  • Creating and sticking to a budget
  • Recording all of your purchases
  • Limit your credit cards

How can you prevent credit card debt?

New York residents just like you may have fallen into credit card debt before. It can unfortunately be easy to make mistakes that land you in financial hot water. However, getting out of debt isn't enough. Once you've freed yourself from debt, you have to then create the habits necessary to keep you from falling back into it again.

FindLaw takes a look at the best ways to avoid credit card debt. One of the first tips is to avoid paying for disposable items on your credit card. This includes things like meals out, groceries, drinks, and other food sources. It's easy for items like that to stack up without you realizing just how much you're spending, since the item itself is long gone before you even get the bill. Solid physical purchases that last are easier to keep track of.

3 signs that usually point to bankruptcy

It does not take much for people to suddenly find themselves drowning in debt. A job loss, pay cut or unexpected medical bills are enough to destroy a comfortable financial position. Furthermore, high debt levels can sneak up on people from all income levels. While you have been struggling to make ends meet, the chances are good that one of your Long Island neighbors has also been dealing with debt issues.

For some people, a credit counseling program might be enough to help them get back on track. For others, this may not be enough. While bankruptcy seems like a bad word for many people, in reality, it is actually a very effective tool that might be able to help you reorganize your finances and escape heavy debt. If any of the following debt situations apply to you, it might be time to take a look at bankruptcy.

Factors behind credit card debt

New York residents with credit card debt may sometimes wonder how this debt piled up. While each person's situation is different, there are several common factors behind most credit card debt.

Many people easily amass debt when they do not use their credit cards responsibly. Pocket Sense says that some people make expensive purchases that they cannot afford because they think that putting the item on their credit card means they will have plenty of time to pay it off. Many people do not consider their other expenses, though, and it is easy for a large purchase to become unmanageable. Some people also do not realize that failing to pay or paying late can raise their interest rate. This can quickly increase the amount of money a person needs to pay each month in order to pay off the credit card.

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