You may have been living with debt for so long that it almost seems like the normal way of life, but you still want to avoid declaring bankruptcy. Perhaps your primary concern about filing for bankruptcy is the impact that it can have on your credit score. For others, considering bankruptcy alternatives may be a matter of pride or principle and a determination to avoid this except as a last resort. Maybe you believe your problems with debt are not yet bad enough to justify a bankruptcy case. Maybe you believe your income is too high or too low to consider bankruptcy. Bankruptcy is certainly not right for everyone, but it is important if you are experiencing ongoing financial issues to at least consider all options so you can make an informed decision. If you want to find a way to tackle your debt problems head-on and put it behind you as quickly and responsibly as possible, you need an experienced bankruptcy lawyer in Katy, TX. A Katy bankruptcy attorney from the Law Office of Corey L. Mills can help you explore your legal options to find an effective strategy for you.
An attorney from our firm could represent you in negotiations with the bank over a loan modification, which could leave you with a reduced loan payment, a lower monthly interest rate, or an extended loan period. The goal of a loan modification is to give the borrower a more affordable monthly payment.
If your house is underwater – meaning it is worth less on the real estate market than you owe on the loan – then your best option may be to negotiate a short sale. In a short sale, the lender agrees to allow you to sell the house for the fair market value without holding you liable for paying the difference between the sale price and the loan balance. A short sale does negatively impact the seller’s credit but not as greatly as a foreclosure or bankruptcy.
Deed in Lieu of Foreclosure
A deed in lieu of foreclosure is another strategy for avoiding the serious consequences of a foreclosure. In this approach, you essentially surrender the deed to the lender with the agreement that you will thereby be forgiven of any obligation to pay on the loan. It is necessary to secure the consent of the bank before carrying out this transaction.