Recent industry studies have indicated that people maxing out their credit cards is at an all time high. It’s little wonder that so many people are having to push their plastic to its limit. The recent mortgage crisis and massive amounts of job loss have forced people to do whatever is necessary to pay their bills. So many people have been hurt by the mortgage crisis that they had to resort to using credit cards to pay their monthly bills. Once those cards are maxed out, the financial problems become much worse.

As a result of all these complications houses are being foreclosed on all over the country and more people are considering bankruptcy than ever before. Being in tough financial straits can make the rest of your life very complicated. There are other options that some people are turning to, like loan modifications. If you are facing the decision between a bankruptcy and a loan modification in Mesa, AZ, you are in a similar circumstance to people from all over the country. It can be hard to know what the best choice is for your particular situation. As with any financial decision, it is best to know what each of the options offers you and your family.

Bankruptcy

Personal bankruptcy offers protection from creditors to people who file. It can also offer a structured repayment plan or total consumer debt elimination, depending upon whether you file for chapter 13 or chapter 7 bankruptcy. The bankruptcy laws were put into place to allow people a chance to rebuild their financial future while remaining protected from aggressive creditors and any related legal repercussions.

Loan Modification

If you currently have a mortgage and are behind on payments, you can begin the process of a loan modification. This process allows you to have terms of your mortgage changed to make it more affordable and to allow you to get current with your delinquent mortgage payments. Loan modifications can help you to avoid defaulting on your mortgage. If your house gets foreclosed on, you are going to be in a financial situation that is considerably more involved than a simple bankruptcy filing.

Can you do both?

You can file for bankruptcy while you are in the process of getting a loan modification. You will have to work with a professional financial person and your lender to work out the terms. Not every case will be accepted. Some people may have an easier time getting the loan modification after their bankruptcies have been successfully filed. A bankruptcy will considerably lower your debt to income ratio and make it easier for you to work with your lender to get a loan modification. If you are thinking of trying to do a loan modification and bankruptcy concurrently, be sure to have solid financial advice and help to make sure that you do it the right way.