Creditors and Bankruptcy/Mortgage problems

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Expert: Regan Shinski - 7/20/2010


Question
We have an offer from our lender:  Forebearance.  The deal:  For 6 months, we can pay only $450 per month instead of $920.  We are not currently in default.  As long as we pay the $450 on time, will our credit rating be adversely affected?  Will there be any late charges or other penalties?  Any other downside to this kind of deal?  Thank you.

Answer
Hi Larry:

I cannot answer this question because it varies by lender.  They will send you a forbearance agreement - basically a mortgage addendum/new contract.  Whatever the terms are in that document will prevail.  I would SPECIFICALLY address your concerns and negotiate to put it in there.  These things are not set in stone although many lenders have firm company rules they may adhere to.

One CERTAIN downside is the $2,820 ($470 x 6) will definitely get added to the back end of the mortgage.  This means you are paying interest on this amount until the mortgage is paid off and your monthly payments will deduct some amount less from your principal each month.  However, if you can't pay the $920, you can't pay the $920 and this may be worth it.

Good luck, I hope it works out for you.
Regan

Creditors and Bankruptcy

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Regan Shinski

Expertise

I can answer questions on collections, repossessions, bankruptcy, credit repair, credit counseling, FICO scores, credit planning, and the cause and effect of credit related decisions. I can also answer questions on collection settlements and preparing to sue your creditors for false debts and credit reporting.

Experience

Fifteen years ago I was financially devasted due to severe health issues. I filed bankruptcy, had a foreclosure, car repossession, tax lien, and ruined credit. I immersed myself in credit law. I settled dozens of accounts and had them removed to improve my credit. I personally sued four creditors and collection agencies and won cash settlements for their false reporting on my credit reports. Since then, I have completely recovered and have nearly $100,000 in revolving credit lines and perfect credit. I have owned a credit repair company for the past five years and have an additional three years of specific work in the collections and debt management industry. I am fully versed in the Fair Debt Collection Practices Acts (FDCPA), Fair Credit Reporting Act (FCRA), and have used them successfully in collection settlements and lawsuits for myself and others. I am also familiar with and abide by the Credit Repair Organizations Act (CROA). I have deleted or helped delete literally hundreds and hundreds of derogatory items from consumers' credit reports and helped negotiate many settlements with collection agencies and creditors. I have also advised people on bankruptcy at any stage. In the current credit market, I have successfully advised numerous people on how to obtain credit and how to negotiate for better terms.

Education/Credentials
BA - University of Minnesota

Past/Present Clients
(private)

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