Bankruptcy and Your Home
Filing for Bankruptcy does not mean you will automatically lose your home!
If you are current on your payments and want to keep your home while eliminating other debt, it is possible to do so in the vast majority of cases. If you are current on payments but struggling financially and want to surrender your home, bankruptcy can give you time to make an orderly transition. Either way, it is important to consult with an experienced bankruptcy attorney – especially if you believe you have significant equity in your home.
Bankruptcy will not buy you more time if your home has already been sold in a foreclosure sale. Therefore, don’t wait till the last minute to see an attorney!
To keep your house, you still have to pay for it
The most important thing to remember when considering bankruptcy is that you still have to pay the mortgage if you want to keep your house. If you cannot afford your home or do not wish to keep it for any reason, either Chapter 7 or Chapter 13 allows you to surrender the property.
What About Loan Modification?
A loan modification can have serious implications on your bankruptcy. Therefore, if you are considering a loan modification or possibly filing for bankruptcy, it is very important to sit down with an experienced bankruptcy attorney and discuss you options prior to entering into a loan modification with your lender.
Foreclosure vs. Bankruptcy
A foreclosure will stay on your credit report for 7 years, whereas a bankruptcy will stay on your credit report for 10 years. However, mortgage lenders view a foreclosure more negatively than a bankruptcy. Even though bankruptcy is a negative credit entry on your credit report, a bankruptcy will help discharge some of your debts, which means that you have more money available to pay future creditors.
Myth: If I want to keep my home, I have to file Chapter 13 Bankruptcy. FALSE!
Most consumers will file for either Chapter 7 or Chapter 13 bankruptcy. Usually, a Chapter 7 filing is the preferred choice, but many attorneys are now advertising that the only way to save a home is to file a Chapter 13. This is not true! It is possible to save your home in a Chapter 7 Bankruptcy. Many of our clients are homeowners who keep their homes after filing a petition for Chapter 7 Bankruptcy. Our experienced bankruptcy attorneys can evaluate your financial situation and determine if a Chapter 7 or Chapter 13 is appropriate for you.
