Foreclosure is quite often the nightmare scenario. In reality, foreclosure can be avoided in many ways.
You can negotiate with your lender to get a better rate. You can sell the home to save your value in it, via a regular sale or short sale to pay off the debt. However, sometimes your lender will not negotiate a new payment plan. And you may not want to sell your home. You have one more good option: filing bankruptcy. This guide gives 6 success tips on keeping and protecting your home and income.
Get Financial Help
You may need to do far more than just file bankruptcy. Sometimes the problem is with your finances. For example, you may be paying some incredibly high interest rates on credit or medical bills. Some financial counseling may help you understand the advantages and disadvantages for both selling your home and filing bankruptcy.
Hire a Lawyer
The path to success is in hiring an experienced Texas bankruptcy lawyer. You have many options. You can save your home with bankruptcy, but which form? You have a home exemption in bankruptcy, but what are the rules? Texas bankruptcy laws are complex. A lawyer helps you save your home, save money, and protect other assets. The right lawyer with have both experience and a fair price.
Chapter 7 May Not Work
Unfortunately, Chapter 7 is more about saving money than saving homes. You have less legal protection here to stop a foreclosure because you are discharging debt and not paying on it. If your problem is credit card debt, Chapter 7 is smart. If your problem is your mortgage, Chapter 13 may be better. This is again where a lawyer can help.
Chapter 13 Can Help
Chapter 13 bankruptcy will likely be your best option. This is a debt repayment plan where you pay on debts instead of eliminating them. In legal terms you are still discharging debt, but by paying on it. If you file Texas Chapter 13 bankruptcy correctly and with the right lawyer, the judge will put an automatic stay on your money, assets, and home. This stops all collections against you, including foreclosure. If you file before foreclosure papers are filed, you can save your home. This is a crucial step.
Saving Money and Buying Time
On paper Chapter 7 is more about saving money because you are discharging debt. And yes, you can discharge a mortgage n Chapter 7, if you feel paying is impossible.
Chapter 13 can save you money too. If you put a lot of money into the home, that investment disappears in foreclosure. Also, you are buying yourself time to pay on debts, typically 3-5 years.
Filing at the Right Time
Filing bankruptcy at the right time is crucial. Time is never more important than in foreclosure. For success, hire an experienced Texas bankruptcy lawyer, consult with him or her on your options for protecting the home, and then file as soon as possible. Remember, if you wait too long, you may run into some problems, such as being unable to stop the foreclosure.
