How to Keep Your Home During Bankruptcy
The real estate boom allowed many individuals to purchase a home. However, with the real estate crash, many homeowners are now unable to pay for their homes and are facing foreclosure. Those who file for bankruptcy may have the option of keeping their homes, depending on the type of bankruptcy they file. However it is important to consider all options, including bankruptcy alternatives such as negotiating with your lender or seeking government help to modify your loan terms, before filing.
Chapter 7 Bankruptcy and Homes
Chapter 7 bankruptcy is a good option if your wish to discharge your debt and essentially start over. However, a bankruptcy trustee can take any property you own that is not exempt and sell it, giving the money to your creditors. Though rules vary from state to state, most bankruptcy laws exempt at least part of the home’s equity from collection thanks to the state’s homestead exemption. Chapter 7 does not offer any options for catching up on missed payments. If you wish to keep your home, Chapter 7 may not be the best option.
Chapter 13 Bankruptcy and Homes
Chapter 13 bankruptcy offers a lot better options for keeping your home. Chapter 13, unlike Chapter 7, does not immediately discharge your debt. Rather, it allows you to negotiate and create a repayment plan over a period of three to five years. In exchange, you keep your assets, including your home, with the promise of repaying your debt. It is important to factor into your repayment plan the cost of your mortgage payment each month. In order for this option to work, you must have enough income to meet your current mortgage payment as well as pay the other payments included in your court-approved payment plan. If you do not, re-financing or selling your home, if possible, may be your best option. Taking Your Home Into Consideration When Filing For Bankruptcy Without filing for bankruptcy, the lender could potentially foreclose on your home. Rather than allowing this to happen, seek the experienced legal counsel of the bankruptcy attorneys at Oswalt Law Group. With years of experience aiding those facing bankruptcy, the Oswalt Law Group will look at your individual case and offer suggestions for bankruptcy filing or alternatives for bankruptcy. They will listen to your concerns, such as keeping your home, and offer options. Rather than risking foreclosure and losing your home, speak with an experienced bankruptcy and foreclosure attorney today. Contact the Oswalt Law Firm in Phoenix, Arizona, for a free initial consultation.