How Does Filing Bankruptcy Affect my Foreclosure?
If you are in foreclosure or are facing foreclosure proceedings then you may be wondering if filing for bankruptcy can help you avoid the foreclosure and save your home. That is a complicated question and the answer is both yes and no. When you file bankruptcy there are several different chapters of the bankruptcy laws under which you may file. Each different chapter has different pros and cons and different eligibility qualifications so you need to consult with a bankruptcy lawyer to determine which chapter of the bankruptcy law works for you.
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The most common chapter of the bankruptcy law is Chapter 7. A Chapter 7 bankruptcy is also known as a straight bankruptcy. Under this chapter in the bankruptcy law a debtor (the legal term for the person filing bankruptcy) turns over all of their non-exempt assets (exempt assets are the assets you are allowed to keep when you file bankruptcy) to the bankruptcy lawyer, who will in turn sell the assets to raise as much cash as possible to pay to your creditors (the people you owe money to) Once you have passed some courses and a certain amount of time has passed you will be discharged from bankruptcy and will have a fresh financial start. By filing Chapter 7 bankruptcy you may be able to save your house from foreclosure. Some states have your homestead as an exempt asset, but others do not. To find out if your state has a homestead as an exempt bankruptcy asset simply use Google and search "your state bankruptcy exemptions"
The other most common chapter in the bankruptcy laws is Chapter 13. This bankruptcy law chapter is also known as a debt adjustment. Under this chapter you, the debtor, will make a re-payment plan to your creditors. You still have to pay your mortgage payments, other expenses and your bankruptcy lawyers fees. This chapter will be favorable to you if your state does not have homesteads as an exempt asset and you are desperate to save your home from being foreclosed. However, if you were unable to make your monthly payments before, it may be even more challenging for you to keep up with your payment plan obligations than before if you file under Chapter 13 bankruptcy. You may find down the line in your re-payment plan, it is impossible for you to keep up with the payments. At this point your home will be foreclosed; you may have delayed the inevitable foreclosure proceedings, but in the end you may still be unable to save your house from foreclosure.
Filing for bankruptcy can be a valid alternative to save your home from foreclosure if you do your research and understand your obligations and expectations and understand that filing for bankruptcy is not a "save my house from foreclosure" magic wand, and that in the end you may end up paying a lot of money and going through a lot of headaches to only delay the foreclosure process.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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