How Filling for Bankruptcy Affects your Home?

August 29, 2016

The law office of Michael A Ziegler handles tcpa debt collection, bankruptcy cases, and debt collection harassment. We always advise people to do the best they can to get out of the debt that they are in, and we try to come up with a solution to make this happen that works for you. One of the more extreme solutions is filing for bankruptcy. Most people’s prime concern when filing for bankruptcy is buying a home, or how the bankruptcy will affect your current home.

How Filling for Bankruptcy Affects your Home?

Bankruptcy affects your home in multiple ways. One of the most positive ways that bankruptcy will affect your home is that it prevents foreclosure. Mortgage payments are a large chunk of your monthly bills, and they frequently get out of hand for many people in America. Declaring bankruptcy will stop foreclosure proceedings if you are behind on your mortgage. I put an automatic hold on all of your creditors, which includes your mortgage and can keep you from losing your home.

Chapter 13 and chapter 7 are the two types of bankruptcy that you can personally file for. These each have a different impact on your mortgage. If you file for chapter 7, your liability is discharged. This does not mean, however, that the mortgage disappears. The debt still has to be settled if you plan to keep the home. Basically, your home is the collateral for your loan. So, you are exempt of responsibility for paying back the loan, the court may decide to sell your home to settle the debt. If your home is sold for more than the debt, the court will use the remaining amount to pay off other creditors.

With chapter 13, you have the opportunity to pay back your debt with a repayment plan that works for you. The courts will come up with a reasonable payment plan for you to pay back your creditors, including your mortgage lender.

Some people get behind on their mortgage because their other debts are so overwhelming that they cannot afford to pay both. If this is the case for you, you may be able to reaffirm your mortgage during bankruptcy. This means that the court will allow you to continue your mortgage as if you had not declared bankruptcy, since you can now afford the payments without your other debt looming over your head. In this case, your bankruptcy debts will not include your mortgage.

Bankruptcy is a complicated process. If you have more questions about how your home will be affected during bankruptcy, or about tcpa debt collection, call the law office of Michael A Ziegler.

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About the Author

Ziegler Diamond Law: Debt Fighters, provides effective legal services to consumers in Clearwater, Florida, and throughout the Tampa Bay area who are facing home foreclosure, unmanageable debts, debt collector harassment, or other debt-related problems.