Helping Nebraskans reach financial freedom


Series Wrap Up – Nebraska Sub-Prime Borrowers And Chapter 13 Bankruptcy

Posted by on Jan 13, 2015 in Chapter 13 | 0 comments

This post wraps up my series on how the Chapter 13 bankruptcy process can assist “sub-prime” borrowers in Nebraska. I covered a number of topics as part of this discussion. Issues I looked at included: How sub-prime borrowers benefit from the bankruptcy process How Chapter 13 can be used to “cramdown” an auto loan Additional benefits of one cramming down their car loan How bankruptcy can save a home from foreclosure How Chapter 13 can “strip” mortgages from a Nebraska residence How the Chapter 13 process can assist one with high interest rate debt Gaining these benefits has become increasingly important for people as more and more Nebraska residents found their credit damaged after the 2008 financial collapse. If you are in a sub-prime borrowing trap, due to a low credit score, then you may need to obtain a financial fresh start. Contact our Omaha bankruptcy attorneys today to learn more about filing for Chapter...

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How Nebraska Residents Can Make Debts Affordable Through Chapter 13

Posted by on Jan 13, 2015 in Chapter 13 | 0 comments

This is the next post in my series on how the Chapter 13 bankruptcy process can benefit “sub-prime” borrowers in Nebraska. My last discussion looked at how additional mortgages can be “stripped away” through the process. In this article I’ll take a look at how one’s debts can be made more affordable through Chapter 13. Nebraska sub-prime borrowers can rid themselves of high interest payments through Chapter 13 Today’s economy has resulted in many people having less than stellar credit. Many Nebraska residents are straddled with high interest rate debts as a result. These debts can be in the form of credit cards with high interest rates as well as payday loans. This high interest rate debt places many borrowers in a financial trap; they can barely afford higher than normal monthly payments so they resort to simply paying the minimum on a bill each month. Only paying a monthly minimum results in almost an entire payment going to interest and the principal stays in place for years. This can make getting out of debt highly difficult. Rather than staying in this trap, it may be best for one to obtain a financial fresh start. The Chapter 13 process is designed for those with a decent income and/or with assets they wish to keep. If you are straddled with high interest rate credit card debt or loans then that debt can often be eliminated, leaving one with a bankruptcy payment that is much lower than their current monthly obligations. If one’s high interest rate debt is in the form of a car loan, then Chapter 13 can reduce the principal balance of the auto loan as well as the monthly payment. Too often, sub-prime borrowers remain a high credit risk for lenders because they are in a financial trap which they cannot escape. The Chapter 13 process can get a person out of this cycle. Omaha, Nebraska residents who find themselves in this trap should contact an attorney immediately. Filing for chapter 13 can actually improve the credit score of sub-prime Nebraska borrowers Many Nebraska residents have found themselves in the sub-prime credit trap. This trap can be difficult to escape because, as one carries a large amount of high interest rate debt, lenders are less willing to make low rate loans. When one files for bankruptcy then their debt to income ratio is lowered and, often, they become a low risk borrower more quickly than they would by simply trying to pay their way out of debt. If you are an Omaha, Nebraska resident and you are struggling to get out of the debt then contact our bankruptcy lawyers...

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Using Chapter 13 to Strip Away Additional Mortgages On a Nebraska Residence

Posted by on Nov 20, 2014 in Chapter 13 | 0 comments

This is the next post in my series on how the Chapter 13 bankruptcy process can assist “sub-prime” borrowers in Nebraska. My last post discussed how residents can use the chapter 13 process to prevent the foreclosure of their home. In this post I will deal with another issue that is common to many homeowners – using chapter 13 to eliminate additional mortgages on one’s residence. The chapter 13 process can “strip” additional mortgages away from a Nebraska residence It is not uncommon for Omaha residents, as well as others throughout the state, to have multiple mortgages on their home. Unfortunately homes are not worth what they once were. If you have multiple mortgages, and your home is worth less than the first mortgage, then you may be able to rid yourself of the second obligation. This is known as “stripping” the second mortgage. The way it works is straight forward; the second mortgage becomes an unsecured debt and that amount is included in your chapter 13 bankruptcy plan. It is treated like any other unsecured debt, such as credit cards, medical debt or past due phone bills. Upon the successful completion of your chapter 13 plan, the second mortgage is wiped out as well. As I discussed in my last post, you will be required to continue making the payments on the first mortgage. This “stripping” can apply to additional mortgages as well as home equity lines of credit. If your home is worth $100,000, and your first mortgage has a balance of more than $100,000, then the additional mortgages and/or any equity lines can be stripped. If you have two mortgages and a Home Equity Line of Credit (sometimes called a “HELOC”), and the home is worth more than the first mortgage but is not worth more than the first two mortgages combined, then you will be obligated to pay both mortgages but the HELOC can be stripped away. Many Omaha residents have not only saved their homes, but stripped away additional mortgages through this procedure. Chapter 13 cannot be used to reduce the principal balance of your primary residence’s first mortgage There is a big difference between how chapter 13 applies to auto loans and mortgages on your primary residence. In the case of a car, you can “cramdown” the auto loan to match the vehicle’s value in chapter 13. You cannot, however, use the process to reduce the value of your first mortgage to match the current value of your home. This is an area that comes as a surprise to many people. The chapter 13 bankruptcy process can still be used to reduce your other monthly obligations, making your overall budget, including your first...

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Nebraska Residents Can Use Chapter 13 Bankruptcy To Save Their Home From Foreclosure

Posted by on Nov 18, 2014 in Chapter 13 | 0 comments

This is the next post in my series on how chapter 13 bankruptcy can assist “sub-prime” borrowers in Nebraska. My last two discussions dealt with how Nebraska residents can use chapter 13 to cram-down their auto loan and additional benefits achieved through chapter 13. In this article I will be addressing an issue that is still plaguing many Nebraska residents – how to save their home from foreclosure. Using the chapter 13 process to stop a foreclosure in Nebraska Chapter 13 bankruptcy can prevent the foreclosure of your home and allows you to become current on your mortgage. If you are behind on your mortgage, and you file a chapter 13 bankruptcy petition, then two things will happen. First, an “automatic stay” is put in place. This prevents the bank from foreclosing on your home as long as you continue to make your regular monthly mortgage payments. Second, the amount in which you are behind on your mortgage will be caught up through your chapter 13 payment plan, which may be a length of up to five years. Filing for bankruptcy is often the best option for many people wishing to save their homes. I’ve spoken with many Omaha, Nebraska residents who feel like bankruptcy is not an option. Many believe that if they cannot make their payments now then they would not be able to make a chapter 13 payment to catch up their arrears. The truth is, however, that quite often chapter 13 will reduce one’s monthly obligations in other areas. This reduction of obligations can result in the chapter 13 payment, which includes your past due mortgage amount, being less than what you are currently paying on debt each month. In many situations, you have more money left over at the end of the month by reorganizing your finances through the chapter 13 process. Home owners in Nebraska must continue to make their mortgage payments through the duration of a chapter 13 bankruptcy It is important to understand that filing for bankruptcy is not a “get out of jail free” card in regards to your mortgage. You will be obligated to make the payments on your existing mortgage. If you do not make your mortgage payments then the lender will have a right to foreclose on the home. In Nebraska, your mortgage payments will continue to be made directly to your lender; the past due mortgage amount will be paid through your chapter 13 plan. The Omaha area, and Nebraska in general, continues to feel the impact of the mortgage collapse. In 2014 there are still many “sub-prime” borrowers who have income and could save their home if they were given the chance to do so....

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Nebraska Residents Receive Additional Benefits When They Cramdown Their Car Loans

Posted by on Oct 15, 2014 in Chapter 13 | 0 comments

This is the third post in my series on how the chapter 13 bankruptcy process assists sub-prime borrowers in Nebraska. My last post discussed how one can keep their car and reduce the principal on an auto loan through chapter 13. In this post I will discuss additional benefits that stem from doing a “cramdown” of your car loan. These benefits include the fact that your loan will receive a lower interest rate and that your car payments can be made more affordable. Nebraska filers of chapter 13 bankruptcy can receive a lower interest rate on their car and reduce other bills at the same time If you are reading this article then the chances are that you are behind on your car payments as well as your other monthly obligations. The chapter 13 bankruptcy process assists with each of these problems. First, as I discussed in my last article, the amount by which you are behind on your car payments can be dealt with through your bankruptcy and the principal of your loan may be reduced. Additional good news is that while you will continue to make your car payments, sub-prime borrowers will receive a reduced interest rate known as the “till” rate. This means that their auto loan will be paid off much faster. Second, your other monthly obligations will be made much more manageable as many debts will be reduced or eliminated through the Chapter 13 plan. In other words, the process makes your situation much more manageable and allows Nebraska residents to get back on stable financial footing. On one hand you may be feeling like you can no longer afford your car. But, on the other hand, if your loan arrearages are put into your bankruptcy payment plan, and your other bills are reduced, then your car suddenly becomes affordable. Combine the reduction of auto-loan principle which occurs in chapter 13 with the reduction in your interest rate and you will find that the bankruptcy process may essentially transform your sub-prime auto loan into a more conventional car debt. If you are a Nebraska resident struggling then you should contact an Omaha bankruptcy attorney immediately. There is no reason for Nebraska residents to wait to file chapter 13 Nebraska residents struggling financially should not wait to consult with a chapter 13 attorney. The sooner you begin the process then the sooner the automatic stay is put in place – this means that, sooner rather than later, you can stop worrying about bill collectors and being behind on your various bills. There are other ways in which sub-prime lending has impacted Nebraska residents. One of these is the fact that many Nebraskans are still struggling...

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