Can You Save Your House If You File Bankruptcy?
Financial problems almost always add stress to your life. If those financial problems are at the point where your home is being threatened with foreclosure, the stress is undoubtedly at an extremely high level. In fact, you probably spend a good portion of your day trying to figure out how you can save your house from foreclosure. One option is bankruptcy. People are often under the mistaken belief that a debtor often loses his or her home in bankruptcy when the opposite is typically true – most debtors are able to save their home from foreclosure by filing for bankruptcy.
If you have been threatened with foreclosure by your lender, or you have actually received notice that foreclosure proceedings have been initiated by the lender, you only have a short period of time within which you must act to save your home. Bankruptcy can halt the foreclosure process as well as provide a long-term solution.
The actual filing of a bankruptcy case automatically stops the foreclosure sale of your home. No action by a judge is necessary – the simple act of filing the case stops the foreclosure.
You then have one of two options. Most attorneys advise that in order to save your home from foreclosure, you must file a Chapter 13 bankruptcy case. Chapter 13 requires that you immediately make your next mortgage payment and your wages and income tax refunds are garnished for up to five years to repay the missed mortgage payments, your car loan and your unsecured creditors, i.e. credit cards, medical bills, pay day loans, etc.
However, our office has developed a much better procedure that enables our clients to save their homes. We stop foreclosures by filing a Chapter 7 bankruptcy case. Instead of filing a Chapter 13 bankruptcy case that requires our clients to stay in an active case for up to five years with their wages and income tax refunds garnished to pay their past due mortgage payments and other debts, a Chapter 7 case stops the foreclosure sale, discharges their unsecured debt and requires no wage garnishment. Immediately after filing the Chapter 7 case, we begin working on a home loan modification with the client. In the modification application, we request that the interest rate be reduced, the years to repay the loan be extended and even the debt owed to the lender be reduced if the home is worth less than the debt owed to the mortgage company. The past due payments are amortized over the new life of the modified loan. This enables the home to become much more affordable and the ability to save the home is greatly increased.
If an attorney has suggested that a Chapter 13 wage garnishment case is the only way to save your home, please call our office for a free consultation and let us explore Chapter 7 and a home modification request to save your home. This process has worked successfully for hundreds of our clients. We offer a free consultation. Don’t delay if you want to save your home!