If you are a homeowner and your house is about to go into foreclosure, you may be wondering what your options are with bankruptcy, and what the benefit will be to you. You may be wondering if a bankruptcy can save your house. Or perhaps you have already been served a notice of a foreclosure and are thinking about contacting a bankruptcy attorney. The following are a few things you should understand about foreclosure and bankruptcy.
You will need to qualify for a bankruptcy
Just because your lender is foreclosing or about to foreclose on your property does not automatically quality you for a bankruptcy. In general, you will need to qualify by income, and your means to pay your bills. Just because you are having trouble paying a mortgage does not mean you will be able to declare bankruptcy. It may be that a judge looks at your finances and tells you to rent a place that is cheaper than your current mortgage payment. This is for chapter 7 bankruptcy. The standard to qualify for a Chapter 13 bankruptcy is lower. However, this does not discharge most of your debts like a Chapter 7 filing does. It simply reorganizes the debt.
It is possible to save your home
If your lender has not yet served a foreclosure notice to you, it may be possible to go through a chapter 13 bankruptcy. Your mortgage will be reorganized in the sense that all of your late fees and other charges will be tacked onto the end of the mortgage. You will need to financially demonstrate that you can make your monthly mortgage payments, but cannot under your current circumstances. Once you file for bankruptcy, all legal actions related to foreclosure or any other debts you have will come to a stop. Everything must go through a bankruptcy court.
You still have options if your home is in foreclosure
If you have already been served a foreclosure notice, there are still advantages to a bankruptcy. Granted, the chances of keeping your home after the foreclosure process has begun is diminished, but you can speak to an attorney. There may still be possibilities for your situation. However, a bankruptcy filing will freeze a foreclosure for several weeks, if not months. This will give you time to find a new place to live. In addition, all expenses a lender has after selling your home, such as repairs, selling cost etc, can be discharged before you even receive them. Lenders are notorious for billing the homeowner for foreclosure costs.
Although bankruptcy is not something everybody qualifies for, you may be one of those people that do. Bankruptcy can be a path to saving your home. If not, a bankruptcy can give you time to breathe and eliminate financial consequences of a foreclosure.
For more information, contact professionals like Stuart R Whitehair Attorney.