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Contact the Law Offices of James Scott Farrin 1-866-900-7078

Natural Disasters like Hurricane Sandy can Lead to Increase in Bankruptcy Filings

Hurricane Sandy devastated some parts of the East Coast. Homes and businesses were destroyed. Some are left without a place to live. Some businesses will be closed for months.

Tornado_07312014Early estimates of the damage are in the billions, but the true financial impact may not be known for some time. The pace of the cleanup effort will impact businesses, jobs, and economic recovery.

For some, Hurricane Sandy and other natural disasters like it don't just represent a loss of property. Natural disasters that cause as much damage as Sandy did can cause devastating financial loss that can lead to bankruptcy.

First, these natural disasters can destroy personal property and possessions. While some homeowners may be protected by insurance, many others only carry basic protection, which may not cover damages from a natural disaster. Still others may only be renting their homes, and may not carry renter's insurance to protect against damages.

Not only can a natural disaster wipe out a person's home, but it can also destroy valuable personal possessions. When the tally is totaled for the home, cars, and personal items, the damages could be hundreds of thousands of dollars. Few of us have that kind of money in our savings, and without good insurance to cover those damages, few of us would be able to withstand that kind of financial blow.

Second, as Hurricane Sandy showed, natural disasters can shut down businesses for months, leaving some workers without a way to earn a wage. Without savings, a few months without a steady income can be a financial blow to anyone. For some, it could mean losing everything.

Many who are in the path of devastating natural disasters like Hurricane Sandy may find relief from the overwhelming financial stresses through bankruptcy. Depending on the extent of the debts you face as a result of the natural disaster, the type of debts, and your income, you may be able to eliminate some of the debts and seek a fresh financial start.

North Carolina Bankruptcy Lawyers

At the Law Offices of James Scott Farrin, a North Carolina Board Certified Specialist in Consumer and Business Bankruptcy Law may be able to help you find debt relief through bankruptcy. Call 1-866-900-7078 for a free evaluation of your case.

Paper Reports that Home Loans are Available to Many In as Little as a Year after Bankruptcy Filing

Many people who file bankruptcy fear that it will be years before they can buy a home (perhaps for the first time) because the bankruptcy will be on their credit report for 7 to 10 years. However, the New York Times reported last week that this fear is unfounded for many, with some mortgages becoming available to some consumers in as little as a year after bankruptcy has been discharged.

According to the paper, those who file for Chapter 13 bankruptcy protection qualify for a mortgage guaranteed by the Federal Housing Administration (FHA) one year after discharge, and those that file for Chapter 7 qualify in two years.

Of course, consumers will have to work on managing their credit following their bankruptcy discharge to improve their score. This can be done by paying bills on time and using credit responsibly.

HandShake_07312014Financial advisors say that using one or two credit cards with a small balance and paying them off regularly is a great way to rebuild your score after a bankruptcy. If you can't qualify for an unsecured card, then you may be able to get a secured card (one that is backed by a cash deposit) from your bank.

Though a bankruptcy does remain on your credit report for up to 10 years, it is not a financial death sentence. As this report shows, consumers can get approved for new credit relatively quickly following a bankruptcy discharge, and responsible financial management can quickly bring your score back up.

In most cases, filing for bankruptcy is a powerful tool in helping consumers who have become overwhelmed by debt to take charge of their finances and get back on the road to recovery. For many consumers, if they do not file for bankruptcy, they will struggle with overwhelming debts for years, leaving them unable to move forward with purchases like a car or new home. For those consumers, bankruptcy makes financial progress possible.

North Carolina Bankruptcy Lawyers

If you are in over your head in debt, a North Carolina bankruptcy lawyer at the Law Offices of James Scott Farrin may be able to help you. Call our offices at 1-866-900-7078 for a free consultation and to find out how bankruptcy may be able to help you!

Don’t Wait Until It’s Too Late to Call a Bankruptcy Lawyer!

Frustrated3_06032014A common scenario I run into as a bankruptcy lawyer is that people will contact me because their home is in foreclosure and they want to find a way to save it, possibly by filing for bankruptcy. However, many of these people have let their mortgage fall so far behind that not even bankruptcy can help them. They waited too long to call a lawyer!

Unfortunately, the answer to my question "How many months are you behind on your mortgage?" is far too often "Years." Many people who call me have tried to work with their mortgage companies for months or years to get their loan modified, and the bank refuses to accept payment while negotiations are underway. Meanwhile, the sale date on foreclosure proceedings is delayed and they continue to rack up more late payments.

When the bank finally puts a stop to negotiations and refuses to accept any modifications to the loan, all of the mortgage payments that were delayed suddenly become due and the foreclosure proceedings that the homeowner may have thought would be delayed again move forward. Some of these people have become 2 years or more behind on their mortgage payments and have only a few weeks to come up with the past-due amount.

If these homeowners are now 2 years behind with a mortgage payment of $850 a month, that's $20,400 due immediately to save the house from being sold at foreclosure.

Not many of us have $20,400 sitting around - especially if we were already struggling to pay our mortgage.

Some of the people I talk to may have saved some money while they were negotiating with the mortgage company and weren't required to pay their mortgage payment. However, the amount they may have saved is usually far less than what they owe. This could be because:

  • A job loss or reduction in hours may have cut their income (causing them to fall behind on their mortgage in the first place).
  • The money that would have been spent on the mortgage was used on other living expenses for which there weren't funds.
  • Unexpected expenses or emergencies came up that required use of those savings.
  • The savings were used to pay down credit card bills or other debts, with the expectation that the mortgage would be modified.

 

What Bankruptcy Can Do For You

It is often when people find themselves on the eve of a foreclosure sale they thought would be postponed again but was not, and modification is off the table with as much as 2 years in past-due payments owed, that they call a bankruptcy attorney to try and save their home.

There are several types of bankruptcy, but when it comes to filing a bankruptcy with the purpose of trying to save your home from a foreclosure, Chapter 13 is generally the type of case filed. A Chapter 13 bankruptcy is a reorganization of debts that allows you to do things like catch up on your mortgage payments over the course of your bankruptcy payment plan.

Here's the catch: A Chapter 13 bankruptcy can only go up to 60 months (5 years). During this time, you must pay your current mortgage payment IN ADDITION TO the past-due amount that you owe. Mortgage, plus.

It comes down to the math. The further you are behind on your mortgage when you file a Chapter 13 bankruptcy case, the bigger your monthly payment must be to bring it current within the 5-year plan. You will also have some or all of your bankruptcy attorneys' fees and a trustee commission to pay in your plan, in addition to any late fees or back taxes.

It's not all bad news! A Chapter 13 bankruptcy offers many benefits if you are looking to reorganize your debts. You can reduce the interest you pay on a car loan and stretch out the payments. In some cases, you can reduce the balance you owe on your car loan, and credit card debts and medical bills can often be completely wiped out with little to no payments required. There are even some cases where you can "strip" off a second or third mortgage and treat that as a general unsecured claim (like a credit card).

Call a Bankruptcy Attorney before It's Too Late!

Don't wait until the mortgage company tells you that it won't modify your mortgage and that you now owe more than you could afford to pay!

Don't get me wrong. Modification, if it works, can be a great savior for home owners, particularly when income has declined and it is not going to go back up. However, there are no guarantees that the bank will accept your proposal, and if you wait too long before looking at other options, you may be out of options.

If bankruptcy is the right step for you, the sooner you file, the sooner you can take control of your debt and begin to pay it back (if you file Chapter 13) or the sooner you can free up some income by discharging your unsecured debts (most Chapter 13 cases and Chapter 7 cases).

The sooner you file, the less money you will pay in the long run in fees and penalties, as well, saving you a lot of money.

Don't think of bankruptcy as a measure of last resort! If you are behind on your mortgage or have become over you head in debt, bankruptcy may be a powerful tool to help you better manage your budget and take control of your finances.

Call me today at 1-866-900-7078 for a free consultation and to talk about your options. Don't wait until it's too late!

Contact Information

Raleigh Law Office

5848-100 Faringdon Place
Raleigh, NC 27609
Phone: 919-834-1184
Toll Free: 1-866-900-7078

Durham Law Office

280 South Mangum Street, Suite 400
Durham, NC 27701
Phone: 919-688-4991
Fax: 800-716-7881

Fayetteville Law Office

517 Owen Drive
Fayetteville, NC 28304
Phone: 910-488-0611
Toll Free: 1-866-900-7078

Charlotte Law Office

201 McCullough Drive, Suite 220
Charlotte, NC 28262
Phone: 704-599-1078
Toll Free: 1-866-900-7078

New Bern Law Office

1505 South Glenburnie Rd, Unit P
New Bern, NC 28562
Phone: 252-634-9010
Toll Free: 1-866-780-3422

Greenville Law Office

702 G Cromwell Dr.
Greenville, NC 27858
Phone: 252-355-5205
Toll Free: 1-866-780-3227

Greensboro Law Office

300 N. Greene Street, Suite 850
Greensboro, North Carolina 27401
Phone: 336-665-7072
Toll Free: 1-866-900-7078

Goldsboro Law Office

214 South William Street, Suite 3
Goldsboro, NC 27530
Phone: (919)-731-2581
Toll Free: 1-866-900-7078

Henderson Law Office

514 Dabney Drive, Suite 200
Henderson, NC 27536
Phone: 252-492-4600
Toll Free: 1-866-900-7078

Roanoke Rapids Law Office

709 Julian R. Allsbrook Highway
Roanoke Rapids, NC 27870
Phone: 252-537-9670
Toll Free: 1-866-900-7078

Rocky Mount Law Office

3202 Sunset Avenue, Suite B
Rocky Mount, NC 27804
Phone: 252-937-4730
Toll Free: 1-866-900-7078

Sanford Law Office

703-B South Horner Boulevard
Sanford, NC 27330
Phone: 919-775-1564
Toll Free: 1-866-900-7078

Wilson Law Office

2315 Airport Blvd Suite A
Wilson, North Carolina 27896
Phone: 252-246-9090
Toll Free: 1-866-900-7078

Winston-Salem Law Office

301 N. Main Street, Suite 2409-C
Winston-Salem, NC 27101
Toll Free: 1-866-900-7078