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Martha L.* of North Providence is one of many homeowners who, despite their best efforts, found themselves with a foreclosure notice in hand this past year. Martha is a public high school teacher approaching retirement. An educator’s salary is sparse to begin with, but she was managing to stay afloat by sharing her home with her sister and brother-in-law. Like so many Rhode Island families facing foreclosure, they had lived comfortably up to this point but were unprepared for sudden financial turmoil.

The Worst Case Scenario

Martha recently became very ill and was not able to teach. Soon after, her brother-in-law lost his job and was struggling to find new work. The financial gap rendered the family unable to keep up with their mortgage payments. Between medical expenses and the lack of steady income, they quickly fell four months behind on their mortgage payments and the bank threatened to foreclose.

Desperate to keep their home, the family members attempted to file Chapter 13 bankruptcy by themselves, and tried to restructure their existing loan to regain some financial solvency. In the end, however, the bank opted to release their Chapter 13 status and foreclose the home.

A Call for Help

By this time, the debts were mounting. The family had accrued $40,500 in unsecured debt and a mortgage arrearage of $63,000. Seeking the help of a qualified Rhode Island bankruptcy attorney, they contacted Janet Goldman to intervene and negotiate new terms with the bank.

Janet understood that Martha and her family had a strong attachment to the house. Although the property was initially purchased for $167,000, the family now owed $311,000 thanks to interest and inflation.

Despite the challenges the family faced, they were not giving up. This was their home, and it was the best place to accommodate their tightly knit extended family. Janet Goldman refiled the Chapter 13 proceeding to freeze the foreclosure. In the interim, Janet interceded and was able to arrange new terms for the modification of the loan and loss mitigation activities with the bank.

The Life Changing Outcome

With Janet’s help, Martha’s family was able to restructure their current mortgage. The family will be able to significantly reduce their debt over the course of 30-60 months, with lowered interest rates and new payment options. In the meantime, they are able to retain their cherished home while working to gradually discharge their debt. Thanks to the intervention of an experienced bankruptcy attorney, Martha and her family can enjoy the peace of mind that comes with knowing that, while challenges may still lie ahead, they have an expert ready to assist them along the way.

*Indicates names have been changed.

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