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Could You Reduce Your Debt Load?

If you don’t have enough cash each month to keep making your existing mortgage payments, there are a few ways that you might be able to make them affordable. Basically, you need to either get the mortgage payments reduced or get your hands on more cash.

Here are the main ways to go about this (all of which are discussed elsewhere in the book):

• Negotiate with your lender for lower payments (by increasing the term of the mortgage from 30 to 40 years, for example), a lower interest rate, or even a decrease in the loan’s principal balance. As the number of foreclosures increases, lenders are showing more flexibility in working things out with borrowers.
• File for Chapter 13 bankruptcy and come up with a repayment plan that will let you reduce the amount of your monthly payments on your other debts and get rid of them altogether in three to five years, or
• File for Chapter 7 bankruptcy to get rid of your unsecured debts such as those from credit cards, medical services, or signature (personal, unsecured) loans, so you’ll have a greater share of your income to devote to your mortgage.