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If you’re struggling with debt and considering bankruptcy, speaking with a bankruptcy lawyer can help you determine your best options and give you some clarity on how the process works.

At Sawin & Shea, LLC, our Chapter 7 Bankruptcy lawyers have helped clients just like you in the Indianapolis and surrounding areas. With over 65 years of combined bankruptcy and consumer protection legal experience, we know what it takes to help our clients achieve financial freedom and successfully complete their Chapter 7 bankruptcies.

Before working with any lawyer, however, it’s always important to do your research and prepare a list of questions to ensure the lawyer you choose has the experience and skills necessary to help you successfully navigate the bankruptcy process.

1. What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy, also known as liquidation or straight bankruptcy, can help those having financial difficulties clear away various types of debts. When you file for Chapter 7 bankruptcy, the Court will place an automatic stay upon filing, which stops creditors from collecting payments, garnishing wages, or repossessing property.

You will be assigned a trustee during the process who will review your assets and finances. They will then determine what, if any, non-exempt property they can seize and will use the proceeds from that property to repay a percentage to your creditors. Most Chapter 7 cases are what we call “no-asset” cases and people keep everything they have.

2. How Long Does Bankruptcy Chapter 7 Take?

In general, the entire process from filing to discharge of debts takes about three to four months. However, every case is different. Various factors can play a role in how long your bankruptcy takes, such as how long it takes to submit all of your documents and if a Trustee is going to collect and sell off any of your property. And a significant amount of time comes from mandatory waiting periods required by the law.

3. Will All of My Debt Get Discharged?

When you file a Chapter 7 bankruptcy, it is only your unsecured debts that will be eligible for discharge. This includes debts such as credit card balances, medical bills, personal loans, utility bills, back rent, mortgages, and car payments. However, if you used your home or car as a secured debt with a lender, you may need to return the property to the lender if you don’t pay as agreed.

Some unsecured debts are not eligible for discharge in a Chapter 7 bankruptcy, which include:

• Child support
• Student loans
• Alimony
• Certain kinds of tax debt
• Homeowners’ association fees
• Court fees and penalties

4. Will I Lose My Property When I File Chapter 7 Bankruptcy?

State and federal laws protect certain properties in bankruptcy, meaning they are exempt and cannot be taken by your Trustee on behalf of your creditors. Most people keep everything they have in Chapter 7 cases. It is important to talk to a bankruptcy attorney about what might be at risk in your case.

Also, if you have a debt that is a lien against collateral (a car loan, a mortgage loan), the creditor can force a return of that collateral to try and partially satisfy their debt. That being said, most creditors allow debtors to reaffirm their secured debts, which means you can keep the property so long as you are current on payments.

5. What Are Your Bankruptcy Lawyer Fees?

Legal and attorney fees can vary from one law firm to the next. There are also court fees you will need to pay when you file. Currently, the Court’s filing fees for Chapter 7 are $338. As for the lawyer fees, you should ask your attorney what their fee structure is when you sit down to meet with them. A good lawyer will have nothing to hide and should be upfront about the cost of working with them.

6. What Will Happen to My Credit Cards When I File Chapter 7?

Most debtors cannot keep their credit cards when they file for Chapter 7. You will need to disclose all of your credit cards that have a balance on them when you file. However, even your cards that have a zero balance will likely lose borrowing privileges. But the good news is that credit card debt is dischargeable in Chapter 7 bankruptcy.

7. How Long Will Chapter 7 Bankruptcy Stay on My Credit Report?

Typically, Chapter 7 bankruptcy stays on your credit report for ten years. The standard is ten years for Chapter 7 and seven years for Chapter 13. This means that doing things after bankruptcy to build credit is important.

When you sit down with your bankruptcy lawyer, they can help you weigh the pros and cons of filing and your credit report taking a hit. In many cases, it is worth it to file to alleviate the financial burden, even though your credit will be affected. In a lot of cases, bankruptcy can actually improve your credit. It can stop negative information from continuing to pile up on your reports. Your lawyer can also offer advice on rebuilding your credit faster after your bankruptcy is complete.

8. Why Do I Need a Chapter 7 Bankruptcy Lawyer?

Navigating bankruptcy on your own is generally not advised. While you can file without one, there are a lot of legal details and paperwork to stay on top of, and if you make any mistakes, it can negatively affect your case and prolong the process.

Working with a Chapter 7 bankruptcy lawyer will give you peace of mind and help the process go smoother. They can also help protect your assets and help you more efficiently achieve financial freedom.

A good bankruptcy lawyer will:

• Offer you a free initial consultation to review your case and help you determine your best options.
• Offer you advice and help you better understand what to expect.
• Help you gather all necessary information and file paperwork.
• Represent you in court.

Sawin & Shea, LLC: Chapter 7 Bankruptcy Lawyers

At Sawin & Shea, we provide compassionate and understanding representation to those struggling with debt and filing for bankruptcy. Whether you are considering applying or need help with something during or after your bankruptcy, we are here to help.

Contact us at 317-759-1483 or send us an email for a free consultation today with one of our Chapter 7 bankruptcy lawyers today!

The post Questions to Ask a Chapter 7 Bankruptcy Lawyer Before Filing for Bankruptcy appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

In this blog, we’ll share details about loan modification, who is eligible, how to obtain one to stop foreclosure, and how a lawyer for foreclosure can help.

What is foreclosure?

Foreclosure is when a lender exercises its right to seize your mortgaged property if you fail to repay your loan. The process usually begins when you miss a mortgage payment. If you go 90 days without making a scheduled payment, your mortgage will go into default. Your lender will then notify you that you are in default and begin foreclosure proceedings. If your lender has gained legal authority to foreclose, you’ll have to vacate your property. It will then be sold “as-is.”

In 2022, the national foreclosure rate was .23 percent of all housing units, down from .36 percent in 2019 and the peak of 2.23 percent in 2010. While it is the 17^th largest state by population, in February 2023, Indiana had the 5^th highest foreclosure rate in the nation at a rate of one in every 2,956 homes.

What is a mortgage loan modification?

A loan modification is a change in your loan terms agreed upon between you and the loan owner to help you avoid default and avoid foreclosure to keep your home. In most cases, a loan modification makes your mortgage payments more affordable. The goal is to reduce your monthly payments so you can afford your loan each month.

In a loan modification, your lender would agree to one or more of the following options to reduce your monthly payments: 

      · Lower the interest rate if they are currently lower than when you originally locked in your loan

      · Extend the loan’s term, which gives you more time to repay your loan and lower your monthly payments 

      · Much less commonly, your lender may agree to allow you to pay some of your principal balance later to help reduce payments

      · Modify your loan from an adjustable interest structure to a fixed-rate loan, which is helpful if you need a predictable monthly payment.

Who is eligible for a mortgage loan modification?

Your home must be your primary residence to qualify for a loan modification. You will also have had to have gone through a financial hardship that caused an income loss or reduction, such as taking on a lower-paying job, being unable to make your monthly payments, or being in danger of falling behind. Many lenders require you to be in default before agreeing to a loan modification. 

Lastly, you’ll have to show that you can make regular payments under the terms of the loan modification agreement. Beyond that, different investors have specific terms under which they will approve loan modifications. Although loan modifications can stop foreclosure, they can also negatively impact your credit score, making it difficult for you to purchase property down the road.

How to get a loan modification

The process to obtain a loan modification varies for each lender. Still, in most cases, you need to apply through a “borrower response package” or a “loss mitigation application.” Some require a hardship letter that explains why you need the loan modification. Other lenders automatically evaluate you for a mortgage modification if you are behind by a certain number of payments. If you’re denied, you can file an appeal with your lender.

At Sawin & Shea LLC we use Chapter 13 bankruptcy in conjunction with a loan modification program to help people with significant delinquencies on mortgages. Through our program a personal modification representative will work with you and your lender though a Court approved document portal. This provides a great opportunity to get all involved on the same page and helps to facilitate a solution. If a modification is not forthcoming, the Chapter 13 plan provides other opportunities to get the mortgage back on track.

Bankruptcy assistance for Indianapolis area homeowners

The attorneys at Sawin & Shea, LLC have experience helping Indianapolis and surrounding county homeowners prevent foreclosure by combining Chapter 13 bankruptcy with mortgage modifications. If you are wondering, “Will loan modification stop foreclosure?”, our attorneys are committed to providing compassionate, non-judgmental representation to all our clients. Contact us today for help.

The post Will a Loan Modification Stop Foreclosure? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

If you’re at risk of losing your house because of missed mortgage payments, you need to take immediate steps to ensure that you retain your home. Fortunately, Chapter 13 bankruptcy offers debt relief and a solution for stopping mortgage servicers from repossessing your home.

What Is an Adjustable-Rate Mortgage?

An adjustable-rate mortgage is a home loan that features variable payments. Adjustable-rate mortgages’ interest rates and monthly payments are determined by market conditions. This differs from fixed-rate mortgages, where debtors pay a set interest rate for the entirety of the loan. Many Americans are not qualified for a fixed vs adjustable-rate mortgage because their qualifications tend to be more strict.

In addition to standard adjustable mortgage rates, many individuals and families obtain hybrid adjustable-rate mortgages, meaning the mortgage has a set introductory period in which the interest and payments are fixed. For example, if the introductory fixed rate is three years, the debtor would pay non-adjusted monthly payments for three years. After that, their payments would increase or decrease depending on the market.

Right now, hybrid adjustable-rate mortgages may appear appealing because their introductory interest rates are frequently lower than fixed-rate mortgages and have smaller monthly payments. Additionally, there’s a chance that market conditions will cause the mortgage interest rate to decrease, saving debtors money on their monthly mortgage payments.

Although adjustable-rate mortgages have potential advantages, they also come with significant risks that can potentially ruin you economically depending on your financial situation. Future interest rate adjustments can cause your mortgage interest rate and monthly payments to increase, creating financial discomfort.

In 2022, the Federal Reserve raised interest rates to 4.4%, which went into effect on December 15, 2022. That means that interest rates on adjustable-rate mortgages will also increase.

Of course, that doesn’t mean the Fed will continue raising interest rates soon, necessarily, but there’s always uncertainty with adjustable-rate mortgages. Interest rates and monthly payments can increase to the point in which debtors fall behind on their mortgages. 

Typically, mortgage servicers cannot foreclose on a home until 120 days after a debtor falls behind on monthly payments, but if you find yourself missing payments, you need to take immediate steps to protect your home.

Saving Your Home From Foreclosure Through Chapter 13 Bankruptcy

Chapter 13 bankruptcy offers a solution if you’ve fallen behind on monthly mortgage payments. Chapter 13 reorganizes your debt into a three-to-five-year repayment plan. Once you file, you’ll receive an automatic stay stopping any action against your home, meaning that mortgage servicers cannot repossess it as long as you make on-time payments according to your repayment plan. This is even the case if you already have a foreclosure up to the point of the Sheriff’s sale on the home.

This differs from Chapter 7 bankruptcy because debtors are at risk of losing their homes during the Chapter 7 liquidation process.

In addition to being able to keep your home with Chapter 13, you’ll also receive an automatic stay for your vehicle and other possessions.

What Happens to My Mortgage If I Declare Bankruptcy?

It’s important to note that declaring Chapter 13 bankruptcy will likely NOT wipe out your mortgage. Instead, it can help get you back in good standing with your mortgage servicer if you’ve fallen behind on payments. Your Chapter 13 repayment plan will reorganize your debt and include your overdue mortgage payments.

While you undergo Chapter 13 bankruptcy, your mortgage can accumulate late fees, but your mortgage servicer cannot charge you these fees unless you fail to complete your Chapter 13 repayment plan. They can charge you late fees if you drop out of the bankruptcy process or if the bankruptcy court dismisses your case. Additionally, the mortgage servicer can charge you late fees if you convert to Chapter 7 bankruptcy.

One final note is that your adjustable-rate mortgage payments can potentially increase according to your original contract once you file for Chapter 13 bankruptcy. The mortgage servicer is required to inform you or the bankruptcy court about your increased monthly payments. If they fail to offer proper notice and surprise you with increased payments after the bankruptcy process, they may not be legally able to charge you with the enlarged monthly payments.

In the event that the mortgage servicer surprises you with increased monthly payments or engages in another unlawful act, such as harassment, you need to contact a Chapter 13 bankruptcy attorney.

Can You Get a Mortgage After Bankruptcy?

Getting a mortgage after bankruptcy is not impossible, but you will need to be patient. All cases are different, but there are no legal restrictions to obtaining a mortgage or refinance post-bankruptcy. An experienced bankruptcy attorney can help you answer questions about mortgages during and after bankrutpcy.

Contact a Central Indiana Chapter 13 Bankruptcy Attorney

If you’re considering filing for Chapter 13 bankruptcy, you don’t need to go through it alone. Contact Sawin & Shea for experienced legal support in your bankruptcy case. We’ll help you on your journey to becoming debt free.

Get a FREE case consultation by calling our office at 317-759-1483, or you can contact us online here.

The post Adjustable-Rate Mortgages and Bankruptcy appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

One common question we see with those considering bankruptcy is “How long after bankruptcy can I get a mortgage?” which is a valid concern.

If your financial situation improves, it’s understandable that you might want to take the step toward home ownership. And the simple answer is, yes, you can get a mortgage after bankruptcy. It will just depend on how long ago your bankruptcy was, the lender or type of mortgage loan you are applying for, and what type of bankruptcy you filed, such as a Chapter 7 or Chapter 13 bankruptcy. 

Getting a Mortgage After Chapter 7 Bankruptcy

Chapter 7 is the most common type of bankruptcy, but it is also the hardest to get a mortgage after. However, though you can expect your credit score to be impacted for 10 years after a Chapter 7 bankruptcy, you do not typically have to wait that long to apply for a mortgage. If you can re-establish your credit, or if you can find lenders that are willing to work with those who have gone through bankruptcy, you can apply for a mortgage as little as a year after your bankruptcy is discharged.

If you work on making your credit better after your discharge, most people are able to get a mortgage in 2 to 4 years after a Chapter 7. The exact timing can also depend on the specific type of mortgage loan you apply for, so keep that in mind when you start looking into buying a house.

Getting a Mortgage After Chapter 13 Bankruptcy

Getting a mortgage after a Chapter 13 Bankruptcy is often easier than after Chapter 7. This is because when you file for Chapter 13, you agree to a payment plan to repay your creditors over three to five years—and this has less of a negative impact on your credit score.

In fact, if you can show proof that you are making timely and consistent payments, you may be able to apply for a mortgage while you are still in the process of your Chapter 13 bankruptcy. FHA loans, for example, are available to those who are going through a Chapter 13 bankruptcy, so long as they meet certain conditions.

You will be more likely to be eligible for a mortgage during Chapter 13 if you:

• Have made 12 months of on-time payments in your Chapter 13 plan.
• Are approved by the court to purchase a house with an FHA loan.
• Can demonstrate that you are unlikely to have to file for bankruptcy again.

Other mortgage loans you may qualify for while still completing your Chapter 13 include VA and USDA loans. If you are trying to secure a conventional mortgage loan, however, you may need to wait at least two years.

Mortgage Companies That Deal with Bankruptcy

While there is no set list of specific companies that are bankruptcy-friendly, as every lender has different policies, and their policies can change from year to year, there are certain types of loans that you may be able to get more easily, as mentioned above.

• FHA mortgage loans: These are federally insured loans that are more attainable for cash-strapped borrowers and those going through or having just gone through bankruptcy. An FHA loan requires only a 3.5% down payment and only a 580 credit score. You can even go as low as a 500 credit score if you can put 10% down.
• USDA mortgage loans: These loans are also ideal as they offer low mortgage interest rates after bankruptcy and a 0 down payment option. For Chapter 7, you may still have to wait three years—unless you can demonstrate that the bankruptcy was beyond your control and not due to poor financial management. For Chapter 13, you can apply after 12 months of successful payment plan payments.
• VA mortgage loans: If you are a veteran who has gone through bankruptcy, VA loans are a potential option. They offer no down payment options, no minimum credit score requirement, and unlimited use of the loan program. For Chapter 7, however, you may still have to wait two years until you can apply.

Applying for a Mortgage After Bankruptcy

When you apply for a mortgage after bankruptcy, the process is generally the same as it would be if you hadn’t filed Chapter 7 or Chapter 13. However, there are some extra steps you should take to improve your chances of getting the loan.

1. Boost your credit score: If you can re-establish your credit and boost your score as much as possible, this will help before applying for a mortgage loan. You can do this by opening new credit accounts and using them wisely and making payments on time.
2. Letter of explanation: When you apply for a mortgage, including a letter of explanation for why your bankruptcy occurred can help as well. If you can demonstrate that the bankruptcy was beyond your control and that your finances have improved, the lender will potentially be more lenient.
3. Get a preapproval: Sellers and real estate agents will be more likely to accept your offer if you can show that you have already received mortgage preapproval from a lender.

How Sawin & Shea, LLC Can Help

At Sawin & Shea, we provide compassionate and understanding representation to those struggling with debt and filing for bankruptcy. Whether you are considering applying or need help with something during or after your bankruptcy, we are here to help.

Contact us at 317-759-1483 or send us an email for a free consultation today!

The post How Long After Bankruptcy Can I Get a Mortgage? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

Whether it’s a student loan, a small business loan, or even a car loan, many find themselves in a situation where keeping up with payments is difficult due to circumstances outside of their control. Most commonly individuals need help paying their mortgages. When you find yourself in a position where you are struggling to keep up with your loan, a mortgage modification may be the perfect solution. And in this case, contacting a mortgage modification lawyer will guarantee you find the best option for your unique situation.

What Is a Mortgage Loan Modification?

A mortgage loan modification is when the structure of a loan is modified to allow the borrower to successfully repay the loan. This is not available only to individuals who have completely defaulted on a loan. If you find yourself getting behind, speaking with a mortgage modification lawyer can put you in a position to get caught up before it’s too late.

A loan modification on a mortgage can occur in several ways, including:

1. Lowering interest rates
2. Reducing the principal 
3. Converting to a fixed-rate mortgage
4. Extending the term of the mortgage
5. Postponing payments

Questions to Ask Your Mortgage Modification Lawyer

Before hiring a mortgage modification lawyer, here are some important questions to ask to make sure you find the best fit for you and your situation.

1. Have you ever worked with my mortgage company?

• Some mortgage companies are more difficult to negotiate with than others. It’s important to know if your mortgage modification lawyer has successfully modified a loan from your lender.

2. How much will this cost?

• You are seeking help from an attorney because you are in a challenging financial position. You don’t want to get into a tight spot after obtaining counsel because you didn’t ask upfront how much the process would cost. Getting answers to your mortgage modification questions is crucial for your financial stability, but expertise does come at a cost.

3. How long is the mortgage loan modification process?

• Answering this question is important because mortgage lenders may move quickly toward foreclosure if you get behind on your mortgage commitment. This is another reason why hiring a mortgage modification lawyer is so important because they are aware of the timeline of the proceedings and can also negotiate so that you have more time to change your loan specifics.

4. Is bankruptcy a better option?

• At first, it may seem that mortgage modification is a better choice than bankruptcy, but this is not always the case. If you are still unable to keep up with your mortgage payments after it is modified, you are only prolonging the inevitable bankruptcy. Discuss how the two options will affect your credit score and future buying power. Asking your attorney these questions will help you decide what your best option will be to protect your assets and your future.

5. Will you use ‘violations of law’ as a negotiation tactic?

• As is true with many types of negotiations, there is an “easy way” and there is a “hard way.” Typically your loan can be successfully modified using traditional tactics. But occasionally the mortgage lender is unwilling to work with you to find a solution. In this case, your attorney will carefully go through your loan details looking for violations of the law and unjust tactics in the original contract. If any violations are found, your mortgage agreement could be declared null and void. Whether or not your situation could come to this, knowing that your attorney is willing to take these steps assures you that they will do whatever it takes to reach the best possible outcome for you.

Mortgage Modification Experts at Sawin & Shea

If you need to renegotiate the terms of your mortgage, contact the attorneys at Sawin & Shea, LLC. We can answer all of your mortgage modification questions and protect you and your assets from creditors. We’ve helped numerous Indiana residents modify their home loans, and we’re ready to help you. 

Contact us today at 317-759-1483, or you can schedule a FREE consultation with an attorney here. 

The post Questions to Ask Your Mortgage Modification Lawyer appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.