After you have been overwhelmed again and again by business debts that you are not able to afford, you might consider the bankruptcy route. Many people are worried about how to file bankruptcy for their finances and their property, what can be protected? Will it have a huge impact on their life? Will they be able to keep their home?
Of course, what property is kept and what may be sold to pay your debts solely depends upon what type of bankruptcy you file. While some types of bankruptcy will allow you to keep your home, other types will cause you to lose this property so that you can repay your debts. Today we will look at a few factors that will allow you to gain a better understanding.
How to File Bankruptcy and possibly Keep Your Home
Type of Bankruptcy: The biggest factor that will dictate whether or not you will keep your house depends upon what type of bankruptcy you chose. There are many differences between Chapter 7 and Chapter 13 bankruptcy. Bankruptcy is typically used as a way to give you a fresh start when it comes to your business and your debts, which is why creditors will usually work with you and you won’t lose your home right off the bat. Chapter 7 exemptions are strict and tend to leave little in the way of flexibility. Chapter 13, on the other hand, will give you a better chance of keeping your home through the process.
Equity: If you decide to go the route of Chapter 7 bankruptcy, this does not mean that you will automatically lose your home. The trustee will consider how much equity you have in your house. This is the market value of your home minus your mortgage balance and all home equity loans. When there is negative equity in your home and you file for bankruptcy, you will be exempt from having to sell your home. However, if you are over your exemption limit, you will have to sell your home so that you can pay your debt unless you are able to come to another decision.
Affording Your Mortgage: If you have gone through the bankruptcy process, then you want to decide if you are still able to afford to pay your mortgage or if you feel as if you will fall behind on payments. Many people who are free from business debts find that they are able to pay their mortgage easily. From there, they will be able to keep their home. If your income does not allow you to make your payments, your house will go into foreclosure.
Speaking with a Skilled Bankruptcy Attorney
You must get your financial life under control so that you can relieve the stress that you are feeling during this challenging and complex time in your life. With MJ Watson & Associates, our bankruptcy attorneys in Texas have helped many filers understand the process as they discover what concepts apply to these particular cases. We will help you improve your financial situation so that you can get back on your feet. Please contact our bankruptcy attorneys for the fresh start you deserve at 817-877-2861.