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Ways In How Principal On The Mortgage Can Be Reduced
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It has become much more easier for people to own their favorite asset today all because of the attractive offers presented by banks, financial institutions and other money lenders who make an individual come under an agreement or contract where the person in order to avail the money for being able to buy asset like home or vehicle has to put something named as security with these financial lenders. Under a lot of practical circumstances people agree to take this agreement thinking that they would get enough time frame to return the money and they would be able to recover their security and be the proud owner at the end of the day. Most of the times people are not able to pay their monthly mortgage as per the agreement and skip it, under these scenarios the money lenders take possession of the security that is given to them leaving the person in debt. There are legally learned professional wizards who provide solutions for this issue.
How to reduce the principal on your mortgage, the answer is Chapter 13 reorganization, wherein if people’s home is only worth what they owe on their first mortgage, the second mortgage is no longer considered to be a ‘secured’ obligation and can be removed. Through the Chapter 13 program, legal experts basically convert the second mortgage, home equity loan or other lien to an unsecured debt. This process is called ‘Lien stripping’ and has the following benefits:
This plan would create a lower payment going towards the monthly mortgage obligations.
Under the terms of Chapter 13 reorganization, experts can most often eliminate a portion, if not the majority of people’s unsecured debts, including the stripped lien. People are simply required to pay their ‘best efforts’ over the course of the program.
If people are behind on their primary mortgage or a vehicle, and they being paid through the Chapter 13 reorganization, all payments to their unsecured creditors including the stripped lien are deferred until they are caught up on the mortgage or vehicle.
After the successful completion of the reorganization program, documents are filed with the register of deeds to legally remove the second loans or liens from people’s property and any unpaid balances are eliminated or discharged.
Some of the other mortgage reduction ways are:
Escrow Acceleration, wherein experts can resolve mortgage escrow acceleration by taking the escrow shortage and spreading it over the length of the 36-60 months plan at 0% interest vs the typical 6-12 months that the mortgage company sets up.
0% interest repayment on any mortgage arrearages.
If people have a rental property, this program can offer the unique opportunity to reduce the principal mortgage to the current market value.
Bankruptcy attorney Ann Arbor offers solution by using Chapter 13 Bankruptcy plan which is basically a court authorized debt consolidation plan. This plan not only allows people to recognize their debts, but it also provides court protection from the creditors. This protection can also
Stop home foreclosure, set up repayment terms or eliminate further debts and worry if people choose to walk away.
Remove a second mortgage or home equity loan, therefore reducing the total debt owned on people’s house.
Prevent vehicle repossession or allow people to get the vehicle back before it is sold at auction.
Resolve IRS tax debts with favorable terms.
Consolidate and likely eliminate a portion of people’s unsecured debts including credit cards, medical bills, personal loans, judgments and loan deficiency debts.
Most of the people are surprised to know that by using Chapter 13 plan they could protect and restore their credit resulting in a positive effect on their credit.
The Author talks about how people in order to buy their assets sometimes take money from banks and financial institutions and lock up their security with them. Also talks about How to reduce the principal on your mortgage and the steps involved. Also talks about Bankruptcy attorney Ann Arbor and its role according to the legal system.
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