Facing the thought of having to lose your home, the place that you’ve raised your children and found peace day after day for years, is an incredibly difficult thing to do. Whether you’ve lived there for many years or it’s more of a recent purchases, financial difficulties often impact home ownership. When you can’t pay the mortgage, the bank will begin talking about foreclosure.
Bankruptcy is one route to take to get your financial house in order, but it may not help you in keeping your actual house – unless you ask the right questions and make the best decisions in terms of which bankruptcy protection is best for you.
When Is Chapter 13 The Best Option?
If you have fallen behind on your mortgage payments, filing a Chapter 13 bankruptcy may be your best option in terms of keeping your home. Chapter 13, if you qualify for it, will keep lenders from filing a foreclosure on your home. It will also allow you to work out a payment plan to repay creditors and allow you to keep your assets like real estate and cars. Chapter 13 also is good for individuals who have a junior lien or who have nonexempt equity. For many people, filing Chapter 13 may take longer, but it will allow you to keep what you hold dear.
Generally speaking, most people do better with Chapter 13 bankruptcy if they are able to file for it. This is especially true if keeping one’s home is important to them. However, not everyone qualifies for Chapter 13 bankruptcy.
When Is Chapter 7 The Best Option?
If you want to keep your home, filing Chapter 7 bankruptcy is generally not a good idea. However, there are some common exceptions to this rule. If you are on time with your mortgage, don’t need to get rid of a junior lien, and don’t have nonexempt equity, a Chapter 7 bankruptcy can be a quick and easy way out.
Chapter 7 does get rid of personal liability on a mortgage, but if you fall behind on payments, foreclosure is a real possibility. Chapter 7 bankruptcy may temporarily delay foreclosure, but it’s not a long-term solution.
Talk with a qualified bankruptcy lawyer to find out which bankruptcy option is in your family’s best interests. Call the Law Office of Joel R. Spivack for sound legal advice and skilled representation during your bankruptcy proceeding.