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Bankruptcy Could Save Your Home
If you are coping with foreclosure, bankruptcy could save your home. While bankruptcy might not just make your mortgage go away, if you want to keep your home, bankruptcy gives you options. Whether or not you’re facing foreclosure, bankruptcy could make your home both more affordable and more valuable.
You have other options besides bankruptcy, including modification and surrender, all of which you should consider. But if you face multiple sources of financial pressure or have exhausted your other options, filing bankruptcy could save your home.
If you are not facing foreclosure, but you’re having trouble paying your other bills, bankruptcy could make your home more affordable. And if your home is under water, bankruptcy can make your home more valuable. In short, bankruptcy could save your home.
Filing Chapter 13 Bankruptcy Could Save Your Home
When you file for bankruptcy, you get immediate protection from creditors through the Automatic Stay. The Automatic Stay stops foreclosure if you file your bankruptcy prior to the auction. Chapter 13 bankruptcy is often used to gain time to obtain a mortgage modification or explore other workout options.
When you file for bankruptcy, you can get rid of (or “discharge”) many types of debts. But you generally cannot get rid of mortgage debt. In “secured” mortgage loans, your home serves as collateral guaranteeing the loan. If you want to keep your home, Chapter 13 bankruptcy allows you to get current on your mortgage payments. A successful Chapter 13 bankruptcy means that the bank may not foreclose on you for at least five years.
In a Chapter 13, you may be able to reduce your monthly debts payments are reduced to a three- to five-year repayment plan. Your income, assets, and classification of debt determine your repayment plan. By renegotiating and reducing your other debts, your home payments may become more affordable so you can keep your home.
Chapter 7 Bankruptcy Could Make Your Home More Affordable
If you are current on your mortgage but are falling behind on other bills, Chapter 7 may be right for you. By having your other debts discharged in Chapter 7, your monthly mortgage payments may become more affordable. Chapter 7 requires liquidation of unexempt assets, including real estate. Yet it is very likely that you will be able to keep your home in a Chapter 7 bankruptcy. If you are current on your mortgage but at risk of falling behind, Chapter 7 might be right for you.
A Bankruptcy Lien Strip Could Make Your Home More Valuable
You could also lien strip your second mortgage or home equity line of credit and discharge it in a Chapter 13 bankruptcy. If your home is worth less than the first mortgage, there’s no actual security for the second mortgage. Chapter 13 allows you to reclassify these types of loans as unsecured and discharge them through your Chapter 13 plan.
Ask an Attorney If Bankruptcy Could Save Your Home
An experienced attorney can help you to determine how to respond to foreclosure, or whether bankruptcy could make your home more affordable. Bankruptcy may be your last option, or it may be your first. But you should examine all of your financial circumstances when considering how your home fits into your financial future.
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Brian Lee from Lee Legal was an amazing attorney to work with. He took his time, reviewed my documents and we discussed my situation thoroughly. He explained the process and my options as well as gave his recommendation. Not only did he assist, but he ensured that I knew this...
I was very nervous and scared about going through this process. But Brian was very knowledgeable and helped me through it. I was notified about any and all updates to my case and he was very responsive when I had questions regarding any concerns I had. Although a bit nerve...
Brian provided me with a very detailed analysis about my potential case after our first consultation. He promptly responded to all my complex questions, especially navigating student loans and some tax discussions. He is very professional and experienced at what he does, I would...
I've had the pleasure of working alongside Brian V. Lee for several years, and I can say without hesitation that he is one of the most knowledgeable bankruptcy attorneys in the DMV area. Brian's command of Chapter 7, 11, and 13 practice is exceptional, and his clients in the DC...
Brian has the amazing talent of taking complicated legal matters and distilling them down to seamless, frictionless resolutions. He is a phenomenal problem solver and a trusted advisor.
Brian is both warm and professional. He helped me navigate a financial issue that I had not been looking forward to working on and he made the entire experience non-stressful, receiving a lot of anxiety I had around the matter. He is straight forward and a fantastic problem...
I had the opportunity to work with Brian at a time when I was challenged by a professional setback and forced with the challenge of making some very difficult legal decisions. Additionally, I worked with him again as I was dealing with some financial issues pertaining to my...
Still several years from Public Service Student Loan Forgiveness and saddled with significant student loan payments in proportion to my income, I came to Lee Legal to explore the bankruptcy path. Through his counsel, Brian took the fear out of the process and helped me to...
