Blog

Foreclosure vs. bankruptcy: long-term credit impact

Homeowners facing financial hardship may need to decide between foreclosure and bankruptcy. Both options affect your credit in the long term, so understanding their differences helps you make an informed decision. Impact of foreclosure on credit If you can’t prevent foreclosure, it can severely damage your credit score, typically lowering it by 100 to 160 points. This negative mark stays on your credit report for seven years, making it challenging to qualify for new loans, credit cards, or rental agreements. Lenders view foreclosure as a

August 21, 2024 No Comments

Why Chapter 13 bankruptcy might lead to higher interest rates

Chapter 13 bankruptcy can provide a way for individuals to reorganize their debts and create a plan to repay them over three to five years. While this can be a lifeline for those struggling with debt, it can also lead to higher interest rates on future loans. Several reasons contribute to this increase in interest rates. Understanding these key factors can help you navigate your financial recovery. Lower credit scores Chapter 13 bankruptcy affects credit scores significantly. When someone files for bankruptcy, it gets recorded

August 6, 2024 No Comments

The difference between Chapter 7 bankruptcy and debt settlement

When debt becomes overwhelming, individuals and businesses can wonder which path to take to regain financial stability. Common options include filing for Chapter 7 bankruptcy and seeking debt settlement. While both promise debt relief, they differ in process, benefits and consequences. If you are seeking a way out of debt, how can knowing about Chapter 7 bankruptcy and debt settlement help you manage your financial situation? Chapter 7 bankruptcy Also called liquidation bankruptcy, Chapter 7 bankruptcy is a legal process that wipes out most unsecured

July 30, 2024 No Comments

How home loan modifications impact your credit score

A home loan modification can have lasting effects on your credit score in Maryland. Your credit score influences various aspects of your financial profile and future borrowing opportunities. Initial credit score impact Applying for a home loan modification may cause a slight dip in your credit score. This is because lenders typically conduct a hard inquiry into your credit history when evaluating your request. However, this impact is usually temporary and can be improved with responsible credit management. Payment history and credit usage Once you

July 12, 2024 No Comments

Who may file a reorganization plan in Chapter 11 bankruptcy?

If your business is in serious financial trouble, filing for Chapter 11 bankruptcy could give your enterprise a fighting chance to survive by reorganizing your company and your debts. Creating a reorganization plan for your business is part of this process. While you may anticipate that you can create your own plan, there will be other parties who could have the opportunity to compose competing plans to yours. The debtor The debtor, namely the business that filed for bankruptcy, has the first opportunity to submit

June 28, 2024 No Comments

Effective ways to manage overwhelming credit card debt

Dealing with overwhelming credit card debt can be a daunting challenge for many Maryland residents. However, a few effective strategies can help you manage this financial burden. Create a budget Start by listing all your sources of income, including salary, bonuses, and any other earnings. Track your monthly expenses, categorizing them into essentials like rent, groceries, and utilities, and non-essentials like dining out and entertainment. Analyze this information to understand where your money is going and identify areas for potential savings. Debt consolidation Debt consolidation

June 27, 2024 No Comments

The pros and cons of short sales

A short sale happens when a homeowner sells their property for less than the amount owed on the mortgage. This process can help in certain situations, but it also has drawbacks. Short sales typically occur when homeowners cannot keep up with their mortgage payments. Selling their property at a lower price allows homeowners to avoid foreclosure. While pursuing a short sale might seem simple, it has advantages and disadvantages. Homeowners should be aware of potential consequences and make this decision carefully. The advantages of short

June 7, 2024 No Comments

Can you finish your Chapter 13 bankruptcy repayment plan early?

Chapter 13 bankruptcy offers a way for people to restructure their debts and create a manageable repayment plan. In Maryland, as in other states, it is possible to finish a Chapter 13 bankruptcy repayment plan early under certain conditions. Understanding these conditions can help you achieve financial freedom sooner than you expected. Requirements for early completion To finish a Chapter 13 repayment plan early, pay all priority debts in full. Priority debts include obligations such as taxes, child support and alimony. You must also pay

May 23, 2024 No Comments

What are reasons a bank denies a home loan modification?

It is natural to feel worried about approaching your lender to alter your mortgage terms due to financial hardships that impair your capacity to make payments. However, if your bank rejects your application for a modification, you should not feel discouraged or dejected. Your journey to securing a loan change is likely far from over. The truth is that banks frequently turn down mortgage modifications at the initial application stage, and for reasons that you might be able to correct before sending an appeal. Missing

May 8, 2024 No Comments

5 reasons students can graduate with a lot of credit card debt

College is often a time of growth, learning and exploration. However, for many students, it also marks the beginning of a journey fraught with financial challenges. One can be managing credit card debt. 1. Lack of financial education Many college students enter higher education without a solid understanding of personal finance. They may not understand how credit cards work, how to budget effectively or how to manage debt. Without this knowledge, they may misuse credit cards and accumulate high levels of debt. For example, without

April 29, 2024 No Comments