Not everyone is aware of what a forbearance is, or if they really work. James Kutkowski, who runs The Law Offices of J. Kutkowski, Esq., in Emmaus, Pennsylvania, says they are more like bandages for broken arms than anything else. Forbearances can give you time to sort out your finances and decide on a plan of action, but in and of themselves, they’re not usually worth the effort.
Forbearance is when your mortgage lender or other secured creditor gives you a few months of not having to make your monthly payment. The payments that you were supposed to be making will be capitalized into the back of the mortgage. So the bank, in effect, is giving you nothing more than time, which can still be valuable when you need it.
The concept behind forbearance is simple. If you give someone two or three months of not paying his mortgage, he can get the remainder of his financial affairs in order - and then he will not experience financial distress.
Bandage on Broken Arm
In my experience, forbearance is a lot like putting a bandage on a broken arm. It’s better than nothing, but it usually doesn’t solve the problem. It only delays the inevitable.
This is not to say that if your bank is offering you a forbearance and you’re in difficult financial straits that you should not take the forbearance offer. It’s just that if you do accept the forbearance, you still need to be looking at solutions to the problems that caused you to need that forbearance.
If you are behind in your mortgage payments and accept the forbearance offer, some banks will still consider you to be going further past due, even though they’re not requiring you to make payments. I don’t understand how that is any different from you deciding not to make your mortgage payment, but some banks do that.
Other banks will treat you as if you’re not going any further past due, but you’ll still be subject to some collection efforts. Again, I don’t understand that. The bank says you don’t have to pay but their collection agents continue to call you. So there is no difference.
Chance to Catch Your Breath
A lot of people come to my office who want to get a forbearance. For the majority of them, we don’t try to get the forbearance because it’s a solution to their problem. Rather, we try to get the forbearance because it gives my clients the chance to catch their breath and determine whether mortgage modification or bankruptcy is the best solution for their case.
It is truly rare when a forbearance fixes anything. But when used appropriately as a tool in conjunction with the services of a capable bankruptcy lawyer, it can be effective.
This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship.
