MGR 95 – Belt and Suspenders
March 12, 2015
For our 95th episode Money Go Roundtable goes twice weekly, lightening your daily podcasting load without skimping on the answers you need to help keep your personal finances in order. On today’s episode we answer the following questions:
- Do I need to reaffirm my mortgage when I file for bankruptcy?
- I’m in default on my federal student loans. The late fees are outrageous – can I get these fees adjusted and can I modify my loan?
- A creditor has a judgment against me – what can they do to me?
When you file for bankruptcy, your mortgage lender may ask you to sign an agreement that says you will be bound by the original contract as if the bankruptcy never existed.
Sounds like a good idea for the mortgage company, but you don’t need to sign the agreement if you want to keep the house – just make sure you keep paying the mortgage.
So is reaffirmation a good idea for you?
Before your federal student loans go into default, there are no collection fees – just late fees that accrue as you miss payments. Those late fees can’t get adjusted.
When it comes to default you’re talking about collection fees that can reach up to about 20% of the loan balance due. If you try to bring your defaulted student loans current through rehabilitation, a strong student loan advocate may be able to help you negotiate them down.
As to modification, we’re talking about something else entirely.
A judgment is a court order against you. If you don’t pay the judgment, the creditor has a variety of ways to force you to pay.
Those mechanisms vary state to state, so it’s a good idea to talk with a local attorney who deals with those sorts of things. Gene gives some insights about how enforcement of judgments happens in Connecticut so you can get a sense of some of the options.