Will I lose my home if I file bankruptcy?
Updated: Nov 18, 2022
Have you been served a lawsuit and are facing a home foreclosure? You may have been served a foreclosure lawsuit. Many things can affect your ability to pay regular monthly payments and leave in in financial hardship. Job loss can severely affect your financial situation as well as unexpected medical expenses, and unexpected home or vehicle repairs to name a few. When you get a couple of months behind, a foreclosure action may be taken by the bank. You may even be assigned a notice of foreclosure sale date. The idea of the process of foreclosure is daunting and the foreclosure timeline can close in quickly. You may have unsecured debts that are falling behind as well and feel like there are no options. But there is good news!
One of the most common ways to handle foreclosure is bankruptcy filing. You can put a stop to the foreclosure date with an automatic stay that takes effect once you begin the bankruptcy process. You will first need to determine what type of bankruptcy you need to file. Chapter 7 and chapter 13 bankruptcies both have different requirements. Your best option is to consult a bankruptcy lawyer who can help you determine the different ways bankruptcy can help you as well as give you enough time to make the decisions needed to begin the rebuilding process.
Options like short sale or loan modification can help, but a bankruptcy attorney can give you legal advice that a mortgage company may not offer. A mortgage loan is a binding agreement, but if you find yourself at risk of foreclosure, the bankruptcy process has protection in place to help protect you from losing your personal property. The best way is to get a free consultation with a bankruptcy attorney. It is the best thing you can do to help your case and be informed. You can easily miss something and find yourself in trouble with the trustee if you don't consult someone. Not only can they help you with all the details in filing your case, but they can help get you extra time to avoid finding yourself in the foreclosure process timeline.
Ownership of your home means it is a secured property. Much like a vehicle, this falls under secured debts. Credit cards fall under unsecured debts. These are treated differently in bankruptcy but both have exemptions to protect your property.
An attorney can help you sort through the numbers so you don't find yourself owing money to the trustee. They can also help you determine if a chapter 7 or chapter 13 is the best option. The total amount of your debt to how much money you make will play a part as well. A law firm seems like a scary option but is the one thing that will stand in for you in the court so you don't overlook anything important.
They can also help you in the rebuilding process. They will help you review your credit report, get back on your feet, and improve your credit score. It may not be the first place you think of, but it is incredibly helpful. Legal fees play a part in this, but rest assured, the fees far outweigh making a costly legal mistake when dealing in a foreclosure lawsuit.
The legal process of bankruptcy in regard to foreclosure can vary based on the type of bankruptcy you file. Getting a bankruptcy consultation is ultimately the best and safest way to be sure you are covering all your bases. Most attorneys offer a free consultation. Prepare your questions in advance and h