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There are few things we value quite like our home. It is where we spend the majority of our time and where we put significant investments of our income into. Our home is where we sleep, relax, protect ourselves from the outside world, and it is solely ours. We care a lot about our homes and this is why so many people fear losing them from bankruptcy.
We work really hard to make our homes our own and when they take that way from us it feels like they are taking a part of us. That said, homeownership is also something that in itself can lead to bankruptcy.
We love our homes, but when you buy a house or even a condo it can be a massive expense. There’s the mortgage, maintenance, homeowners association fees in certain neighborhoods, and property taxes. It’s a lot to take in and it’s something that can catch you off guard if you aren’t prepared for it.
That lack of preparation is no fault of your own. The truth of the matter is that we don’t properly teach potential homeowners what they need to know about homeownership and that lack of information can prove to be very costly.
As these expenses build up you may not be able to initially pay them on time. Those missed payments turn into debt which turns into interest rate and that interest rate rolls until suddenly you are deep in debt and can’t see any possible way of paying it off.
This is how that home you love so much can turn in to one giant hindrance very quickly. This is also where, depending on the severity of the debt, you may need to seek out bankruptcy as an option to help you pay everything back.
Now you may be concerned about bankruptcy causing you to lose everything. This fear is unfounded because the truth is that bankruptcy is here to help you. Not hurt you. The giant fear about bankruptcy is you are going to lose everything and be kicked to the curb with nothing but the lint in your pockets. This cartoonish interpretation is based in fear.
The truth is that when you are so deep into debt that you can’t possibly pay anything back then you may need bankruptcy merely to survive. Bankruptcy can help you by:
- Removing all your debt
- Giving you a fresh start
- Possibly lowering your stress
- Giving you a new shot at homeownership
Another common misconception about bankruptcy is that you will never be able to buy a home again. Well we are pleased to inform you that is not the case. At Blake Goodman we have many clients who either keep their home during the bankruptcy process or able to find another while going through it. You will have a place to live after bankruptcy. We can’t guarantee you it will be the home you already have, but you will have a home.
One of the key aspects of homeownership and bankruptcy you need to understand is your mortgage. When we enter homeownership we hear all about how you will have a mortgage and you need to make sure you pay it off, but never exactly how a mortgage works.
Allow us to explain. Your mortgage is a large loan, typically from a bank, that essentially pays for your house. When you purchase a house you use this loan to pay for it and your home becomes “collateral,” which means that if you fail to pay back your mortgage then the lender has the ability to foreclose on your home and re-sell it.
This is a major cause of bankruptcy for homeowners. The inability to pay their mortgage. When you can’t pay your mortgage it’s usually because of a change in income of some kind, or a larger expense that takes priority, and sometimes it’s just due to poor spending habits. Whatever the reason for the lack of ability to pay your loan, your mortgage becomes a very costly debt that can lead to bigger debts.
When you purchase a home and receive a mortgage you are going to reach an agreed upon interest rate for your mortgage. This rate will depend on how much of a “risk” they consider you to be. This risk typically applies to your credit score.
If you are someone that struggles to pay off credit cards on time or has a long history of debt then you are going to likely be given a high interest rate when you are given your mortgage.
This can turn simple mortgage payments into overwhelming monthly bills that, when stacked against the rest of your expenses, become unreasonable. If you miss a payment then that interest rate will only make payments even more expensive. This leads you down the path to bankruptcy.
If you feel like this may be the situation you’re in, or if you already know this is the situation you’re in, then you may want to consider bankruptcy. If you act soon enough you may be able to save your home. If not then you could lose your home in the bankruptcy process itself.
Learn about your options and what’s available to you from Blake Goodman. Our expert bankruptcy team can give you your options and see if you really do need to begin exploring bankruptcy.
Don’t let homeownership become a burden. That should be an expense you are proud of. Not one you dread. Contact Blake Goodman today at 808-528-4274. You can also use his online contact form.
Not On This Island? Come See Our Other Offices!
At Blake Goodman, we have offices in not just Oahu, but on Maui as well. We strive to serve the entirety of Hawaii to our best and full ability so there is nobody that is left out of the opportunity to pursue help in their life.
If you are in need of bankruptcy assistance in Maui then check out the website for our Maui offices at DebtfreeMaui.com. We will continue to provide the best services possible to you no matter the location.