On Behalf of O’Brien Law Firm, LLC
Posted on: June 13, 2017
Many people consider bankruptcy because of bills and financial responsibilities that exceed their savings and income. According to the National Association of Realtors, the average monthly amount for mortgages is $1,061, and this can become burdensome. If you have filed for Chapter 13 bankruptcy, though, you may receive an offer from your lender for a modification. These agreements have pros and cons, and there are a few things you should know.
Take advantage of a low interest rate
Because your lender does not want your loan to go into foreclosure, they will likely offer a modification with a low interest rate. After around five years, it may go back up, but it will not exceed the rate specified in your contract or the interest rate qualified buyers are eligible for. Having your interest rate reduced like this, though, can alleviate the burden of a hefty monthly mortgage payment to make.
Revisit filing for Chapter 13 bankruptcy
In such cases, the relief from a modification may make Chapter 13 unnecessary. For many people, though, bankruptcy is not due to any single financial issue — it is the solution to a series of debts and financial burdens. Still, it is worth considering how a modification might or might not impact your decision to file for Chapter 13.
Consider the effect of amortization
Another important factor to take into consideration is the responsibility to taking on the extended amortization that is often included in the modification agreement. This typically entails an additional 40-year agreement, and this may last the remainder of your life. Though a modification may temporarily relieve financial stress, it may also prolong it for years in the long run.
If you are considering Chapter 13 bankruptcy or a mortgage modification, you should be aware of all your options. Contact an attorney for more information and legal advice on handling excessive debts.
On Behalf of O’Brien Law Firm, LLC
Posted on: June 12, 2017
A no-interest credit card certainly sounds appealing, but if you have ever taken a credit card company up on such an offer, you may know that things do not always work out in your favor. No-interest credit cards allow you to make purchases without assessing interest on the amount accrued, but only for a specified amount of time.
Once the no-interest window has closed, you will have to pay interest according to your card’s standard annual percentage rate. This can prove problematic if you still have a considerable balance on your account at the end of that grace period. So, before you apply for that no-interest credit card or sign on the dotted line, consider the following.
The card’s APR
If you are considering applying for a no-interest credit card, do your research about its APR, and then check out how it compares to the APR of credit cards you are already using. If it is higher, going this route is probably not a good idea for you, unless you are absolutely certain you can pay the balance off in full before the no-interest period is over.
If the card you are considering is also a rewards card, you may have to pay an annual fee in addition to interest once the grace period ends. The amount of these fees tends to vary based on factors such as how valuable the rewards benefits are.
It also may prove wise to take a good, hard look at your spending habits. It can be all too easy to take advantage of an interest-free credit card. Before you know it, you have racked up considerable debt, and the no-interest period is nearing its end.
Credit card debts are one common cause behind filing for bankruptcy. If you have any doubt about your ability to pay off your credit card balance in full before the no-interest period ends, you may want to reconsider taking advantage of these offers.