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If you’re a Delaware County resident who’s been struggling to keep up with credit card bills, medical bills, mortgage payments, or other expenses, you may have thought about filing for bankruptcy.  However, while bankruptcy can be a useful strategy for managing debt, it isn’t always the best solution for every situation.  Depending on your circumstances, it might make more sense to explore an alternative to bankruptcy, such as a mortgage modification, debt consolidation, or a pre-foreclosure forbearance plan.  When you contact our Delaware County Chapter 7 lawyers for your free bankruptcy consultation, we can discuss which financial strategy is right for your situation.

3 Alternative Options to Filing for Chapter 7 or Chapter 13 Bankruptcy in Delaware County, PA

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If you are going through a financial crisis, bankruptcy may indeed prove to be the most practical and efficacious solution.  However, filing for bankruptcy may not be necessary if it is possible to resolve the issue by other means.  To give you just a few ideas of the possibilities, our Delaware County Chapter 13 bankruptcy attorneys will examine three examples of bankruptcy alternatives for debtors in Pennsylvania:

  1. Mortgage Modification
  2. Pre-Foreclosure Forbearance Plans
  3. Debt Consolidation

Whether you choose to file for bankruptcy or pursue an alternate course of action, your decision will have significant financial repercussions that can continue to shape your future for many years to come.  Before you make any major legal decision, you should always consult with an experienced attorney for personalized guidance that is specific to your circumstances.

How Does a Mortgage Modification Work?

Are missed mortgage payments the main reason you have been thinking about filing for bankruptcy?  If so, mortgage modification may be a more appropriate strategy.

Like the name suggests, a mortgage modification is a restructuring of your current mortgage.  The purpose of a mortgage modification is to make your payments more manageable by reducing what you owe each month.  Depending on your financial circumstances, the mortgagee (lender) may consent to significant changes, such as:

  • Changing a variable interest rate to a fixed interest rate.
  • Forgiving part of your principal balance.
  • Lowering your interest rate.

The mortgage modification process in Pennsylvania typically takes anywhere from three to eight months to complete successfully.  The eligibility criteria for mortgage modifications vary from servicer to servicer, but our Pennsylvania bankruptcy attorneys can help you determine whether you qualify.  Your attorney will also be able to handle your mortgage modification paperwork, answer your legal questions, and protect your best interests as a homeowner.

What is a Pre-Foreclosure Forbearance Plan?

If you are going through a temporary financial crisis, such as a job loss or temporarily disabling injury that is expected to heal in the future, entering a pre-foreclosure forbearance plan may make more sense than filing for bankruptcy.  In a pre-foreclosure forbearance plan, the mortgagee may agree to temporarily suspend or lower your payments so that you can continue to pay your mortgage.  Generally, these plans last for up to six months.

What’s the Difference Between Debt Consolidation and Bankruptcy?

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Though bankruptcy can both simplify and reduce the payments you owe to your creditors, it should not be conflated with debt consolidation, which is an entirely different concept.

In debt consolidation, the debtor negotiates with his or her creditors with the goal of combining his or her debts into one monthly payment.  When done successfully, this can have the effect of lowering your interest rates, reducing what you pay each month, and ultimately, helping you escape debt more quickly.  As you can imagine, making one monthly payment is much simpler than keeping track of multiple payments, which also makes it easier for debtors to consistently make timely, full payments each month.  Debt consolidation may be right for you if you have numerous creditors and high interest rates.

Delaware County Bankruptcy Attorneys Serving Chester, Drexel Hill, and Ardmore

Remember: the strategies we have described here represent only a few examples of the numerous non-bankruptcy debt management options that may be available to you as a Delaware County resident.  When you contact Sadek & Cooper Law Offices for a free consultation, we can review your circumstances and financial goals in detail to make a determination about which strategy is optimal for your situation.

Sadek & Cooper Law Offices proudly serves all corners of Delaware County, including but not limited to Chester, Drexel Hill, Ardmore, Yeadon, Broomall, Darby, Lansdowne, Media, Woodlyn, and Collingdale.  If you live in one of these communities, or other communities in Delaware County, our Pennsylvania bankruptcy lawyers may be able to help you get your debt under control.  To discuss your options in a free and completely confidential consultation, call Sadek & Cooper Law Offices at (215) 995-2543 today.