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Strategic Default a Valuable Option for Homeowners Drowning in Debt Atlanta, GA

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Strategic Default a Valuable Option for Homeowners Drowning in Debt

Many homeowners in Georgia are continuing to struggle with the current economic crisis. Despite reports of modest improvements in the economy, a lot of Georgians are still floundering in the weak housing market. Stresses are compounded for those dealing with job loss or having their hours cut back. These financial pressures are making it increasingly difficult for people to afford their mortgage payments.

Falling Home Values Can Limit the Choices Available to Homeowners

Unfortunately, this problem is compounded by the fact that home values continue to drop. Homes in Georgia have lost an average of 60 percent in value. In addition, Georgia’s foreclosure rate remains one of the highest in the country with one in every 196 homes facing foreclosure.

Some home values have fallen so far, their owners have no hope of regaining equity in them. Homeowners anxious to make things work with their lenders have tried loan modifications and mortgage assistance programs to make their homes more affordable, but the relief they are offered is not enough in many cases.

Many find the help they need with Chapter 13 bankruptcy, which can be used to strip-off an unsecured second or third mortgage. Unfortunately some families are unable to afford the first mortgage payment and Chapter 13 may not be viable option.

When those methods fail, homeowners are usually ready to part with their homes. In these situations, the homeowner may try to negotiate a short-sale. But even these efforts are not always successful. This is often the time when a homeowner may want to consider a strategic default.

Benefits of Strategic Default

What is strategic default? A strategic default allows a homeowner to give their home back to the bank. This can be done by using either a deed in lieu of foreclosure or a regular foreclosure instituted by the bank.

Financial industry observers recommend considering strategic default when the value of property falls below what is owed. Generally, it is recommended that the value fall so low that it would take years to recover the lost equity. It may also be a good idea if a home is suffering a serious structural defect that would not be covered by a homeowner’s policy.

The most valuable benefit of a strategic default is time, especially if there is not enough money to continue on with payments. The foreclosure process takes time. Homeowners can use this time to save some money and accumulate a modest cushion.

How Bankruptcy Helps After Default

In Georgia, mortgage lenders could attempt to pursue a deficiency judgment for the money that was not paid back. In these situations, it is often in a person’s best interest to pursue a Chapter 13 or Chapter 7 bankruptcy.

People are often surprised by how quickly they can rebuild their credit after bankruptcy. Many experts have found that homeowners who strategically default on their mortgage, file bankruptcy and keep their credit clean for three years have often been able to qualify for a federally backed mortgage again.

Homeowners trying to decide what to do about their homes should speak with an experienced Gainesville, Dallas or Cumming bankruptcy attorney who can review their options with them. Navigating through these issues can be difficult, and it is important to understand the implications associated with each choice so the homeowner can feel empowered to make the best choice for their family.

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Our Client Reviews

Gingold & Gingold LLC
5.0 / 5.0

Based on 28 reviews

Jack L.

They did an excellent job with my case. Jamie took the time to really listen and understand things. She delved into the details and was extremely knowledgeable and non judgmental. Very professional and they know what they are doing. Would definitely recommend!

All C.

Mr. Gingold was recommended by an attorney I had worked with previously. I met with Ira Gingold to discuss credit issues. He went over each specific issue thoroughly. He advised me of the potential outcomes. He did all this in one meeting for a very reasonable price. When we finished I was confident in moving forward with a resolution. He definitely wants to help people take the appropriate course of action for their circumstance.

Karen B.

Dear Mr Gingold, There are so many reasons to be thankful for all you have done and will do. Anyone who has ever had unfavorable experiences with an attorney or the legal system will feel the trepidation that I experienced once I realized that my situation seemed hopeless. It was by chance and happily good luck that I decided to put my future and sanity into your hands. I was mortified at having to deal with my debts by claiming bankruptcy. I remember in our first meeting how you assured me that I was not alone and should not feel ashamed. And, anyone in this position obviously does not have money to spare and you were clear about all the costs and allowing me to pay according to my own ability to do so. You advised me in all aspects of the law, but also, you were at each meeting incredibly supportive and complementary of my personal and professional plans. Anyone else in this situation should feel blessed to have access to your expertise and support.

Lyla B.

I thought the process of filing bankruptcy was going to be a difficult one. However, Gingold & Gingold treated me with respect and dignity from the moment I walked through their door. I had the pleasure of working with Jamie. She is very responsive, professional, and knowledgeable. She took the time and listened to my every concern and handled each and every one of them to my satisfaction. My experience with filing bankruptcy under Gingold & Gingold's representation exceeded my expectations in a major way. They gave me such a peace of mind. I am very pleased with my decision of going with Gingold & Gingold to represent me when I filed Chapter 13 bankruptcy.

Julie T.

Wow! I am finally out of debt and can say that I am debt free after completing my chapter 7 bankruptcy case with Gingold and Gingold. Mr dangled was very knowledgeable and direct with regard to my debt situation. there were no surprises and the case went as I was advised. The staff was also very helpful whenever I had a question. I will definitely recommend them in the future to my friends.

Sherard W.

I cannot say enough about this law firm. From the initial consultation to our discharge, the entire office kept me updated with every step of the entire process. I came to the Gingold after a bad experience with another law firm. Ira and Jamie immediately began treating me like family through this experience. In the end, they assisted with eliminating many debts including my 2nd mortgage. I cannot say enough about the experience and knowledge that Ira brought to the table from the office visits to the court time. Thank you very much for helping me through this tough time. Thank you.

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