How Do Homes Factor into Bankruptcy?
By Walter Bradley | Published on October 27, 2011 | 0 Comments
Deciding to declare bankruptcy is a difficult enough decision on its own, without the added complications of a house and mortgage. But it’s hardly uncommon to see homeowners contemplating bankruptcy, explains Walter Bradley, a Westminster Chapter 7 bankruptcy attorney who has expertise in handling all forms of bankruptcy and complex legal matters. Not surprisingly, the recent housing crisis, and the economic downturn that followed, has brought ever greater numbers of householders into the bankruptcy circle.
Bradley, who practices at the Bradley Law Firm, P.C., understands the complications. Mortgage holders are often far “underwater” on their homes – owing much more than the value of their property, with little-to-no prospect of getting out of debt. In other cases, a homeowner may not be underwater, but might have fallen far behind on payments, says Bradley. Perhaps he or she lost their job, and was unable to meet the monthly commitments, but now has secured new employment, and is struggling with the question of how to proceed. Often, a homeowner is wrangling with the question of whether it’s worth it to keep a house. In any case, by the time a consumer gets into trouble with housing debt, there’s a good chance that they’ll be struggling with other financial responsibilities too, says the Westminster Chapter 7 bankruptcy attorney.
Regardless of whether you choose to pursue a Chapter 7 or Chapter 13 bankruptcy, there is at least one boon that filing brings – it imposes a moratorium on foreclosure and other collection activities. For the embattled homeowner trying to preserve home-ownership, the multi-month foreclosure freeze may be just what the he or she needs to keep lenders at bay and dig out of a deep and difficult hole.
According to Bradley, the Chapter 7 bankruptcy lawyer from Westminster, the tenor of the bankruptcy field has changed. In the past, Bradley says, many clients who came to him with mortgage troubles wanted to keep their homes. Today, ever greater numbers of debtors are aiming to have their home debts released in bankruptcy, and are willing to write off their house in favor of a clean slate. Fortunately, says Bradley, the Westminster Chapter 7 bankruptcy attorney, housing debt can be discharged in both Chapter 7 and Chapter 13 bankruptcy.
It’s also possible to keep your home in either a Chapter 7 or Chapter 13 process. But remember, it is crucial that you have adequate income and a realistic means for paying back accumulated mortgage dues and the overall housing debt. Otherwise, the court may not authorize the housing repayment plan, and may give a green light to foreclosure.
Westminster, CO 80234
Phone: 303-301-7107
*Disclaimer: This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship.