People who are filing for bankruptcy often ask us whether or not it means that they will lose their home. Often, to their surprise, the answer is “no.” Believe it or not, filing for bankruptcy can help you to keep your home while still getting your finances back on track. Depending on the chapter of bankruptcy you are filing, you could have our mortgage reduced and the collection efforts of mortgage companies ceased, relieving your stress and giving you a chance to turn your financial standing around.
By law, when you choose to file bankruptcy, the law stops all your creditors from taking any collections at all, including calls, foreclosure, repossession, and many other forms of collection. This is known as “automatic stay,” and can give you temporary relief to the stresses you are facing. This relief is not permanent, however, as automatic stay only lasts for a few months. After this point all collection actions can resume. So while this can buy you time to find a long-term relief, it is not intended to be long-term relief on its own.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is intended to allow an individual the chance to reorganize their debts into a manageable payment plan. By filing for Chapter 13, you can arrange to repay the arrears on your mortgage over a period of several years. However, you absolutely must stay current on your mortgage payments in addition to making the monthly bankruptcy installment payments. Will this option actually save you money? That depends entirely on your exact situation, so you may wish to speak with a Richmond bankruptcy attorney before opting to file for Chapter 13.
Chapter 7 Bankruptcy
Chapter 7 is the type of bankruptcy that wipes out most debts immediately, with a few exceptions. While filing for Chapter 7, there are two times which you can potentially save your home and stop foreclosure: the first is before you file, and the second is when you actually file for bankruptcy. However, both of these can be a complex process, and it is strongly advised that you have an attorney on your side who can tell you whether or not your home is at risk.
The most important thing to remember regardless of which type of bankruptcy you file is that you cannot keep a house without paying for it. Bankruptcy does not wipe away mortgage debt, but may wipe away any value you are “under water” for.
Learn more about your options when filing bankruptcy from an attorney by calling Bruce W. White, P.C. Since 1980, we have strived to help people seek a financially stable and debt free future by putting bankruptcy law to work for them. We serve as your guide and want to help you through both the good times and the bad in order to help you once again reach financial freedom from debt, collection tactics, and more. Attorney Bruce W. White personally handles every case that he takes, assuring you that you will always receive dedicated, professional counsel that places your well-being at the forefront of his experienced and knowledgeable decisions.To learn more, schedule a free consultation with Bruce W. White, P.C. today by dialing (804) 655-0502.