Taking care of your family as foreclosure looms is a tough task. And it’s not just your house. You’ve got creditors coming at you from all directions. Thankfully, there may be a way to shed all that stress and keep your home in the process.
Foreclosures across the country are dropping to 15-year lows, but Philadelphia still has one of the highest rates among major cities. Losing your home can be devastating, but bankruptcy may provide you with options to keep that roof over your family’s head.
Getting the answers you need from bankruptcy generally starts with the court taking a look at your debt. They can’t dismiss every debt, but they’ll give you an idea of what forgiveness you could expect.
The courts can dismiss a good deal of outstanding money that you owe with Chapter 7, while exemptions could allow you to keep the house. You may still have to meet the same payments as before the bankruptcy, but the belief is that you’ll now have more money available to pay. If you’re too far behind on your payments, that’s when your housing situation may be in danger.
If you have fallen too far behind on your mortgage, then Chapter 13 might be more up your alley. Here you’ll need to craft a plan to present to the courts, which will outline your repayment of back-due amounts. The program will usually unfold over the next three to five years. Keeping up with those payments will likely ensure your lender can’t foreclose on your house.
Bankruptcy can also come in handy immediately after you file, as it puts a stay in place. This will prohibit many actions against you, possibly giving you a short breather from mortgage payments or saving you from a utility provider cutting off service until the court finalizes your bankruptcy.
Knowing the difference between the two forms of bankruptcy is important when you’ve got so much at stake. They can each offer options when things are at the worst, so make sure you know which system will work best for you as you approach the process.