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Once the file for bankruptcy, you have also devise a plan to repay the mortgage amount you have fallen behind on, and you have to begin making regular mortgage payments.
If it is prove that you cannot afford the current mortgage payments, the court can enforce a forced loan modification. This is quite similar to debt consolidation where you can pay unsecured debt without accruing interest on. This way, debt collectors cannot harass you.
When you file for Chapter 13 bankruptcy you have to make monthly payments to a bankruptcy trustee, who has been appointed by the court. The payments have to be made generally for a period of three to five years. The monthly payment is determined by the court after taking into consideration many factors like the amount of debt, your ability to repay and the assets you possess. Through Chapter 13, you can either pay all your debt or under special circumstance just a portion of it.
Many people used hard money loans to repay debts while under Chapter 13 bankruptcy. A hard money loan is made by non-banking institutions to people who have credit scores less than 500 and under normal circumstances, they would not qualify to receive a conventional loan from a banking or financial institution. Usually wealthy people or investor groups give out hard money loans.
Hard money loan can be taken against an asset (invariably real estate property) and it can be taken to pay off a Chapter 13 bankruptcy. The loan can also be used to pay any other major debt you have. However, before you decide on taking a hard money loan to clear off your Chapter 13 bankruptcy, it is better to consult a qualified professional who will give you correct advice.
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