There’s a common misconception that filing for bankruptcy is the end of the world for homeowners. However, millions of people file bankruptcy every year and survive to tell about it, and many of their stories have great endings!
We’re not trying to con you into thinking that bankruptcy is a thrill ride or anything of the sort. It’s a serious process with consequential implications for homeowners. However, filing for bankruptcy could be the best solution to your debt problems. Continue reading to learn some of the consequences of bankruptcy for homeowners.
All collections must stop.
The moment you begin considering bankruptcy, you should begin doing research to find the best bankruptcy attorney in your area. Some attorneys offer a free consultation with your first phone call, allowing them to tell you what to expect from your bankruptcy case.
One of the first pieces of legal advice you’ll get from your bankruptcy lawyer is that your creditors must halt attempts at debt collection. However, this stay is only temporary to allow the bankruptcy court to review your bankruptcy petition. In many cases, homeowners can keep their houses and have their mortgage debt discharged. However, bankruptcy forms can be tricky, so it’s a good idea to have a trusted law firm help you with your bankruptcy filing. Do your due diligence to find the right bankruptcy lawyer and learn as much as you can through each free consultation.
The bankruptcy trustee could sell your home.
It’s important to choose the right type of bankruptcy to ensure you get positive results. Most people file chapter 7 bankruptcy if they can’t afford to pay their debts. This puts their assets in the control of a trustee who sells them to cover as much of the debt as possible while discharging the rest. If your home equity is greater than the exemptions for which your home is eligible, the trustee could sell your home to pay some or all of your debt. You’ll get the portion of the home sale that the exemptions covered.
Many property owners choose to try selling their homes themselves to get the best value for their homes. Of course, it’s a good idea for your house to undergo some renovations to increase its market value. Installing a new roof or deck is a great way to boost your property value. Google “top roof repair in Phoenix” to find the best roofing contractors in the metro area.
Chapter 13 bankruptcy allows you to catch up on mortgage payments.
Some people file chapter 13 bankruptcy if they’re in serious debt but can afford to repay their creditors. In essence, they’re able to end wage garnishment and foreclosure by proving their ability to repay their creditors and adhering to their agreement with the bankruptcy court.
The bankruptcy process isn’t the ideal way to overcome financial hardship, but sometimes, it’s the best option available. Once you get through this stressful time, you can get a fresh start. One of the good things about filing for bankruptcy is that all debt collectors must immediately cease actions against you. You might be able to enter into a repayment plan with your mortgage lender. You could also have your mortgage discharged, and you could even keep your home, depending on your equity. Filing for chapter 13 will give you a chance to catch up on mortgage payments and keep your home as well.
Many business owners have had to go through bankruptcy proceedings only to bounce back and become wealthier than ever, and your financial difficulties don’t define you either. As long as you follow the terms of your debt settlement agreement, filing for bankruptcy can be the right choice for regaining your financial freedom.
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