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Protection from Foreclosure in Missouri and Illinois: Chapter 13 vs. Loan Modification

When you need protection from foreclosure in Missouri or Illinois, you need it fast. For most, walking away from the home where they raised their children and made their lives isn’t a real option. If you’ve started any research, you’ve probably noticed that two options keep popping up: Loan Modification and Missouri or Illinois Chapter 13 bankruptcy. But which one is better for you and your family?

Loan modification used to be more appropriate for people whose financial situation is temporary. If you maybe had a temporary pay cut or a big expense one month and couldn’t afford your mortgage payment temporarily, a loan modification might have been right for you. Now, I don’t know if I would even recommend a loan modification as a temporary fix, given the latest statistics. The big problem is that loan modifications have changed—more specifically, the approval process has changed. Since the housing crisis hit, banks haven’t been able to approve very many requests for loan modifications. In fact, America’s largest lender has only been able to approve 4% of requests.

To even be eligible to apply, you must be behind on your payments. Plus, the lender typically will advise anyone waiting for approval to stop making any payments. By the time most families are told that they aren’t approved, they are so behind in their house payments that it is impossible to catch up.

Chapter 13 bankruptcy in Missouri and Illinois is typically for people who want a permanent solution to their debt problems. While some financial emergencies can indeed be temporary, most debt problems have a snowball effect on your finances. You start falling behind on one bill and, before you know it, you’ve fallen behind on your credit card, car payment, and house payment too. This is the exact situation that a St. Louis Missouri bankruptcy attorney can help you with.

You see, Chapter 13 bankruptcy reorganizes your debt into one low monthly payment. It forces your creditors to take less money over a longer period of time, freeing up a substantial portion of your income and taking the stress off you and your family. It is no wonder that in these economic times people have had more success relying on Chapter 13 bankruptcy in Missouri and Illinois to save their homes than loan modification.

Still not sure if Chapter 13 bankruptcy is right for you? Request a free copy of my ultimate debt guide. “Get Out of Debt: Secrets Your Creditors Don’t Want You to Know,” to learn about the signs that may be pointing you towards bankruptcy, what else bankruptcy can help you with (beside your home), and how to find the best attorney in your area, if that is the path you’ve chosen.

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