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Foreclosure: Will Bankruptcy Save My Home?

Foreclosure, Bankruptcy

Foreclosure: Will Bankruptcy Save My Home?

When debtors start thinking of bankruptcy, saving a home is often one of the most important considerations. If foreclosure is looming, the question of whether bankruptcy can save your home is an important one. Before you rush into major financial commitments, it helps to understand the pros and cons of bankruptcy and how it impacts on the foreclosure of a property.

Will Bankruptcy Save my Home?

With Chapter 13 bankruptcy, you enter into a repayment plan, which involves repaying all or a portion of your debts. This repayment plan will last a period of three to five years. If there are loans secured by the home you are trying to save, in most Chapter 13 cases, it should be understood you are repaying any arrearage on loan payments in addition to keeping current on your mortgage payments. Both Chapter 13 and Chapter 7 bankruptcy result in the court issuing a stay on debt collection activities once you have filed.

A Chapter 7 bankruptcy involves requesting the court discharge most of your debt. In order for this to happen, the court trustee will use nonexempt property sales, if any, to repay creditors. In many Chapter 7 cases, there is no non-exempt property, meaning no sale of property occurs. While you may retain a portion of equity from your home, a Chapter 7 bankruptcy is not often the best avenue to pursue if you wish to save the property. However, the Chapter 7 bankruptcy filing will result in an automatic stay, which will temporarily halt the foreclosure. You may be able to use this time to seek a loan modification or short sale with the lender.

Should I File for Bankruptcy?

Whether or not you should file for bankruptcy when you are facing foreclosure should always involve careful consideration based on your specific financial circumstances. Consulting with a bankruptcy lawyer may also help you make a more informed decision. Filing a Chapter 13 bankruptcy may work for you if you have sufficient income to pay off arrearages as well as current mortgage payments.

Filing a Chapter 7 bankruptcy may not allow you to save your home, unfortunately. The lender can request the right to proceed with a foreclosure, even if you have filed for Chapter 7 bankruptcy, and if you have significant equity in your home, the Chapter 7 trustee may be interested in selling the home. There are alternatives to filing bankruptcy which may suit your financial needs better than filing for Chapter 7 bankruptcy in Georgia.

Ultimately, you should speak to a qualified debt advisor to determine if bankruptcy is the best option for your circumstances. The most important thing is to address mounting debt before it becomes crippling. H. Lehman Franklin P.C. is a debt relief agent and can help you file for bankruptcy if you have unmanageable debts or need to consider debt reorganization. Call the offices of H. Lehman Franklin P.C. if you are worried about foreclosure and think filing for bankruptcy could save your home. We have the qualifications and experience to provide the right guidance based on your circumstances. Reach out today at 912-764-9616 or email us at info@hlfranklin.com to find out more about how we can help.