Bankruptcy: Keeping Your Home

No one wants to ever be in the position of uttering those words: I’m declaring bankruptcy. As early as we can remember, filing for chapter 7 or 13 was seen as an embarrassing and frustrating experience. Like many, you may have had a relative or family friend that went through the process when you were a child. It was the elephant in the room during family reunions.

Today, bankruptcy doesn’t hold nearly the stigma that it once did. Part of the reason for this is because filing is becoming more and more common, unfortunately. With the market continuing to be in a slump, for some chapter 7 or 13 is the only way out of serious debt.

Car loans, lease payments, school loans and credit card bills can all add up rather quickly, leaving you drowning in debt. If you are feeling the pinch from your debt, but are concerned that going bankrupt means losing the house that you’ve called home for a number of years, there may be solutions for you.

First of all, educate yourself on your financial situation. Make sure you fully understand all the debt that you have acquired and are certain that loans and other notes cannot be modified in any way. If you have tried negotiating for lower interest rates and monthly payments and are still unable to make ends meet, then continue forward.

You will likely want to hire an attorney that specializes in bankruptcy negotiations. While you could file on your own, it is easier to have an expert on hand. There is quite a bit of highly specialized paperwork that will need to be filled out and a number of guidelines that have to be followed. Any misstep that you make could hinder your ability to make a declaration.

What will happen once you have sat down with an attorney and explained that you are concerned about losing your home is they will help you determine the type of filing that is right for you. Which filing you make depends a lot on your ability to make future mortgage payments and the amount in which you are able to continue paying.

Also, you and your attorney will look at your overall ownership of your home. If you own the home with another individual, like a partner or a spouse, then this will be taken into consideration within the filing. Your attorney should be familiar with the local, state or federal laws that will affect the kind of filing you can make in this regard.

Most importantly, when you file for bankruptcy, you will be granted what is termed as an automatic stay. So, if your home happens to be in foreclosure at the time of your filing, then the foreclosure will immediately be put on hold. This temporary hold will give you time to meet with your attorney and figure out the next direction for you and your family.