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Washington DC Bankruptcy Law Blog

Are you still eligible for bankruptcy?

As a resident of WAshington D.C. currently debating whether or not you should file for bankruptcy, you may also be wondering what your eligibility is. We at Ammerman & Goldberg will highlight the major changes that bankruptcy law has undergone over the last decade and how that might impact your qualifications.

Changes for Chapter 13 bankruptcy primarily involve the additional need for credit counseling. You must also finish a personal finance management course in order to file for either type of bankruptcy. These additional steps may have been put in place to help you avoid the bad habits that led to you filing for bankruptcy in the first place, thus preventing you from falling into debt a second time. Though it's additional effort and more hoops to jump through, it's designed to benefit you in the end.

What can I keep? The liquidation process in Chapter 7 bankruptcy

As a consumer who is overwhelmed by debt, you know that bankruptcy offers you a way out of the cycle of minimum payments, compounding interest and outstanding balances. Like many consumers in the Washington, D.C., area, you may be hesitant to explore this option due to the stigma that is often associated with bankruptcy and concern over what will happen to your stuff. However, with Chapter 7 bankruptcy, you may have the option to both confront your debt and keep your possessions.

What is mortgage fraud?

As a homeowner in Washington D.C., you've likely heard warnings for all sorts of financial pit traps and fraudulent schemes lurking out there. Mortgage fraud, for example, has been on the rise for years and is still an issue to this day despite attempts to bring its levels back down.

So what is mortgage fraud? According to Freddie Mac, it's the use of false information to aquire a loan, inflate the worth of a property, or otherwise mess with the financial situation to benefit one particular party. It can even tie into violent crimes or criminal enterprises. It's considered one of the fastest growing crimes in the country. In 1996, there were 1,318 reported cases of mortgage loan fraud committed by borrowers. By 2005, this had increased to 25,989.

Protect yourself from consumer debt pitfalls

So you're a resident of Washington D.C. who has been in some financial trouble before, but you're trying to avoid slipping back into debt. We at Ammerman & Goldberg Bankruptcy Law Office wish to help give you tips to help you dodge those hurdles, especially in regard to consumer debt.

First, minimize temptation. All of those credit cards that stores hand out should be avoided. Ideally, you should have no more than 2 credit cards at any given time. Cutting into that number will both reduce your interest rates and monthly bills, and it will allow you to avoid the temptation of just being able to nip over to another credit card once you hit your limit on a different one.

What are the benefits of debt consolidation?

As someone living and working in Washington D.C. and living with debt, you may be considering different options. Debt consolidation might be one of them, and it does have benefits when done correctly and under the right circumstances that may work best for you.

What is debt consolidation, first? As Debt.org states, it's combining any unsecured debt you have into one bill. Instead of having to keep track of multiple creditors and multiple tabs, you can pay off one single loan and write one single check.

Is interest-only mortgage more than you bargained for?

As someone living in Washington D.C. and dealing with rising housing prices and mortgage rates, you may be wondering if interest only mortgages or fixed rate mortgages are best for you. Both have their benefits, and both have their down sides. It's up to you to choose which suits your situation.

However, it is important to note that interest-only mortgages can actually cost you more in the long run. How Stuff Works has stated that interest-only mortgages seem ideal, but can actually be less advantageous than a fixed rate mortgage, which has more predictability. Fixed rate mortgages have, as implied in the name, a fixed rate which is intended to be paid over many years. For example, a mortgage payment intended to last 30 years is common.

Will a bad credit score affect you?

As someone living in Washington D.C., your credit score or credit rating can make or break how easily you can afford to live in the city. A bad credit score can lead to many financial difficulties in your future.

First off, Money Crashers highlights the basics. They state that there are many negative effects that bad credit ratings could have on you not just as a consumer, but as someone trying to make a living. They bring attention to seven different things that a bad credit score can impact, such as higher insurance premiums both with healthcare and with auto insurance. Many companies don't have policies prohibiting discrimination based on these scores, so you could find yourself facing bigger bills.

Give your lender an eviction notice! File Chapter 13 bankruptcy

You want to keep your home, but your lender is knocking at your door threatening to evict you through foreclosure proceedings because you missed a few payments. More than likely, you attempted to work something out with your lender, but those efforts did not bear fruit.

What are the risks of interest-only loans?

Residents in Washington D.C. like yourself may be considering interest only mortgages. However, as with any other large financial decision, it is wise to consider all of the potential risks and disadvantages associated with this option before you make a final decision.

Investopedia lists it as a risky mortgage type, stating that the success of interest only loans can boil down to responsibility. A person needs to invest the extra money they get instead of spending it, and they need to pay toward the principal instead of putting that money toward other things. Some things aren’t financially feasible for certain people, either. For example, you may not be able to afford principal payments.

How can you avoid repo?

Washington D.C. residents like you have likely heard of “repo” before. It’s short for repossession – as in, the repossession of your vehicle if you find yourself in debt. Many find it a scary prospect, but in reality, there are ways that you can avoid having your car repossessed. We here at Ammerman & Goldberg wish to help you navigate those options.

You could potentially refinance or reinstate the loan on your car. However, reinstating the loan might not be available in your state, and it’s generally a one-shot deal so you can only bail yourself out once with this method. Refinancing, on the other hand, could lead to you dealing with higher loans, more fees, or value depreciation.

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