If I file for Bankruptcy will it Save My house from Foreclosure?
Most homeowners fear even the thought of foreclosure on their beloved home. However, filing for bankruptcy can be a savior in certain situations for some homeowners facing foreclosure.
The bankruptcy code has specific provisions which many home owners find their last resort to avoid or delay the foreclosure process.
Nonetheless, bankruptcy is a complicated legal matter that needs to be handled by a qualified bankruptcy expert, and you should know what you are getting yourself into before beginning to file for bankruptcy to save your home from foreclosure.
In this article, we will discuss some key provisions in Chapter 7 and Chapter 13 bankruptcy filings and how each can keep you in your house.
When to File Chapter 7 Bankruptcy?
First let start by asking what Chapter 7 Bankruptcy is in the first place?
Chapter 7 is currently the most commonly used form of bankruptcy in the United States today. In a Chapter 7 bankruptcy filing individuals are allowed to keep certain “exempt property”, so this begs the next questions. What constitutes an “exempt Property”?
An exempt property is basically considered to be “necessities of modern life” meaning items that are necessary for living and working such ones car and home. However the value of property that can be claimed as exempt varies from state to state. You should consult a Bankruptcy attorney in your state for exact details.
Chapter 7 Bankruptcy is also termed as liquidation, you can clear some or all of your debt by surrendering assets such as property, cash, stocks, second home or second vehicle.
If you have plenty of equity in your home and are not behind on your mortgage payments, you can then file for Chapter 7 bankruptcy to prevent foreclosure on your home. However once again you will want to consult with a Bankruptcy attorney in your area for more detailed information.
The stay on foreclosure remains as long as the court-appointed trustee does abandon the property as being worthless to the estate, exempt from collection or till the matter is sub judice.
Conversely, the creditor can ask the court to allow foreclosure if there is an apprehension of the secured claim becoming greater than the value of security during bankruptcy.
Hence, hiding under the shelter of chapter 7 bankruptcy gives you a significant but temporary relief.
Using Chapter 13 Bankruptcy
If you have steady income despite being buried under a mountain of debt, Chapter 13 Bankruptcy claim is bespoke for you.
Under this specific provision, the debtors are allowed to propose a repayment plan typically ranging from three to five years depending on the income.
You can save the house from foreclosure by;
- Complying to all the conditions of the plan
- Regular monthly payments according to original mortgage schedule
- Compensating missed mortgage payments to become current with the lender.
It is evident that bankruptcy may prevent foreclosure on your home, and that’s a great thing. But there are expenses associated with filing for Bankruptcy and homeowners that are behind on their house payments are often not in a position to hire an attorney to begin the process.
Is there any other way to save my house from foreclosure other than Bankruptcy?
If you are one of the thousands of homeowners looking for a way to save your house from foreclosure and don’t have the resources or desire to file for Bankruptcy? You may be asking yourself is there any other way for me to save my house other than filing for bankruptcy? The simple answer is yes! Another option is to sell your home to a cash buyer and close on the transaction quickly to ensure that the sale of the home before the foreclosure process is completed and the home is auctioned off. For many homeowners in america this is a fast and easy solution that is helping save hard working Americans from Foreclosure and Bankruptcy.
If you are behind on your mortgage payments and need help getting out of this unfortunate position and filing for bankruptcy is not a desirable option for you please feel free to fill out the contact information below and a RESCO agent will contact you with more information about an all cash offer on your property.
Once again we encourage you to speak to a well-qualified financial adviser or lawyer before choosing any of the said paths. They can assess your situation comprehensively and suggest a unique and appropriate way out.