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Going Broke! Don’t Let Your Mortgage Lead To Bankruptcy

Bankruptcy, it's something we all want to avoid, even though we all want to own our own homes as well rather than plow money into a rental each month, that is just lining someone else’s pocket. This can cause a bit of a problem though, as unless you can pay for you pad outright you will need to get a mortgage that you keep up the payments on. That is why it is crucial to keep a tight reign on your finances and identify the threats that could lead to difficulties with this situation. So read on to find out what these issues can look like, and how you can deal with them before they become an issue and lead to you going broke.

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About mortgages

Mortgages are often one of the biggest financial burdens that we have to carry in this life. Unfortunately, the main problem that most folks encounter is that they cannot keep up with the mortgage payments. This can be because they find themselves in financial hardship, they have overestimated the amount that they are comfortable paying each month, or the interest rate rises causing them to have higher payment to make each month.

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Unfortunately, in some of these cases, the problem will have got too far out of control to be solved easily. In fact, it is much better to think and plan carefully before you take on a debt like a mortgage than to try and fight the fire of not being able to pay it.

Insurance

For example getting life, accident, and sickness insurance will ensure that your mortgage payments will be covered no matter what happens to your health.

Affordability

Also, it pays to consider carefully the quality of life you want and working back from this to find the figure you can reasonably afford is much more helpful than just falling in love with a home that is beyond your reach and stretching your finances to buy it.

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Fixed rate mortgage

Getting a mortgage that is fixed rather than index-linked too, means you will always know the cost of the payments you will need to make each month. Making it a lot easier to stay in control of your finances and reducing the risk of being landed will multiple bills for your mortgage that you can't pay. Something that can make you extremely vulnerable to bankruptcy.

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Of course, the methods above are all things you have to do before you get into trouble with your mortgage, but is there anything that can help once you are struggling? Luckily, yes there is, although they may not be as effective as the strategies above.

Negotiating with your provider

One method is to contact your mortgage provider and explain your situation, to establish whether they can be more flexible in the payment amounts during your financial crisis. This means that you will at least be paying something off, holding off any default and bankruptcy procedures for the moment.

Debt consolidation

Something else that can help is to look at the possibility of debt consolidation. Not for the mortgage, as they won't allow that, but for the other final demands you have. This then should free up more money each month to be able to meet your mortgage payments and prevent foreclosure and bankruptcy.

Additional financial help

It can also be helped to look at the situation surrounding your difficulties in paying off your mortgage. If it because you have been involved in an accident and been injured and can no longer work, then it may be prudent to seek compensation to help you stay out of financial trouble.

To do this, you will need to find a law firm where the attorneys handle personal injury cases and have experience in the field. They will then be able to assess your case and help you to collate the necessary evidence to take it to court. Although, do be aware that this can take a long time, so there is no guarantee that your compensation if you win, will arrive in time to save you from foreclosing on your home.

Selling up and downsizing

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Lastly, the option that many people pick with a heavy heart is to sell up and downsize. Selling a long-standing home, or family residence is never easy and having to do this out of necessity rather than choice can make it even more painful. However, it is a useful last-ditch option for many people that can no longer afford their mortgages and wish to avoid going broke and ending up bankrupt.

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