Being threatened with the foreclosure of your home is frightening; however, filing for bankruptcy may help you either keep your home for a little longer or prevent the foreclosure from happening at all. But is one type of bankruptcy better than the other when it comes to trying to keep your home? Here’s what you need to know about Chapter 7 bankruptcy, Chapter 13 bankruptcy, and your home.
Chapter 7 Bankruptcy & Foreclosure
A Chapter 7 bankruptcy can be an excellent option for individuals without a lot of assets and a high amount of debt. However, it may not be the best type of bankruptcy to file for if you are being threatened with the foreclosure of your home. A Chapter 7 may help you keep your home for another couple of months without having to pay, typically due to the “automatic stay” that filing for bankruptcy creates. This can be a costly option and you still might lose your home. In some cases, keeping your home for an extra three months could cost you three times as much as you would pay for a rental if you moved.
Chapter 13 Bankruptcy & Foreclosure
A Chapter 13 bankruptcy does not eliminate your debt like a Chapter 7 does, but instead allows you to come up with a reasonable repayment plan based on your income. This can be a viable option for families with significant assets that they want to keep or a high income. It may also be the better choice for families who are at risk of losing their home to foreclosure. With a Chapter 13 bankruptcy, it may be possible to stop the foreclosure for as many as 5 years, or in some cases, you may be able to satisfy your mortgage lender with an agreed upon repayment plan and escape the threat of foreclosure altogether.
When to Contact a Bankruptcy Lawyer
If you are being contacted by multiple creditors and the bank has notified you that they want to foreclose on your home, it is critical that you act quickly and contact an experienced bankruptcy lawyer as soon as possible. Don’t hesitate to get legal help — the longer you wait to move forward with a bankruptcy when your home is being foreclosed on, the more you risk losing your home.
At the Law Office of Howard Tagg, we have the expertise and resources to assist you in filing either a Chapter 7 or a Chapter 13 bankruptcy and can help you determine which is the best fit for your situation. Call now at (903) 581-9961.