About four years ago, I could tell that things were turning south with my business. Cash flow was tight, and customers simply weren't coming back to shop some more. I realized that if I was going to keep my house, I would need to do something to resolve my finances. Although it was scary, I decided to meet with a bankruptcy attorney. After I explained my situation, he helped me to understand the process and how to tell if it was a good idea or not. When I decided to do it, things started changing for me right away. This blog breaks down bankruptcy in layman's terms, so that you can decide whether or not it is right for you.
If you are behind on your mortgage payments, it may feel as if you will never bring your loan up-to-date. Your loan may even be in foreclosure; once this happens, you are at a high risk of losing your home. However, if you want to save your home, one option that you should explore is filing for bankruptcy. Bankruptcy has a number of advantages that can help you keep your home.
Bankruptcy Halts the Foreclosure Process
One of the biggest advantages of filing for bankruptcy is that it immediately halts any steps your lender has taken to begin the foreclosure process. Even if your home is scheduled for a foreclosure auction, bankruptcy will halt the sale of your home. If the foreclosure process has progressed to this stage, it is essential to begin the bankruptcy process as soon as possible.
You Can Repay Your Missed Payments and Late Fees Over Time
Another benefit of filing for bankruptcy is that it provides you with the opportunity to repay any missed payments over a lengthy period of time. If you don't believe you will the financial resources to bring your mortgage up-to-date, bankruptcy basically permits you to spread the missed payments out over a period of three to five years. The length of your bankruptcy varies based on your income, assets, and the amount and type of debt that you have. At the end of your bankruptcy, you will resume your normal mortgage payments and your loan payments will be current.
If you want to keep your home, your attorney will recommend that you file for chapter 13 bankruptcy. Your chapter 13 bankruptcy payment will include your current mortgage payment in addition to any payments that you have missed.
Bankruptcy Permits You to Keep Your Assets So That You Are Prepared for Potential Emergency Home Repairs
One problem that some homeowners face is that they have the assets to pay their mortgages, but liquidating these assets would put them in a precarious financial position. For example, assume that you have ample savings in your 401(k) or individual retirement account (IRA) to bring your mortgage up-to-date.
However, if you liquidate your account, this will wipe out your retirement savings. You may also have to pay penalties and taxes on the money that you take out. Filing for bankruptcy lets you keep your hard-earned money in your savings accounts. This also helps ensure that you have a nest egg to tackle any future home repairs that are required to keep your home in good condition. Contact a company, like James Alan Poe, P.A., for more help.
Share27 February 2018
