Your house is more than four walls and a roof. It is the place where your family feels safe. It is the place where your children learn and grow. It is the place where you can relax after a difficult day. It acts as a symbol of your hard work.
A lender can threaten everything your home means in your life with a single notice of foreclosure. That piece of paper can make you feel like you did something wrong, that you could have done something different. It can make those four walls feel like they are closing in on you.
Is bankruptcy the only way to stop a foreclosure?
Chapter 7 is often the better choice if you have little equity in the home. It is a way in which you can sell the home and eliminate the debt.
Chapter 13 is often a better choice for people who want to keep their home, have significant equity in their home or earn a good income but are behind on mortgage payments.
It does not eliminate the liability. Regular payments resume once the consumer exits bankruptcy. Although you cannot eliminate your mortgage liability, you can still work with your lenders to modify the loan.
You do not have to wait until a lender decides to foreclose on your property to get help from a bankruptcy attorney. You also do not have to file for bankruptcy to find a viable solution. Bankruptcy alternatives include:
- Agreements with loss mitigation
- Forbearance agreements
- Paying a sum to reinstate the loan
- Government programs such as "Making Homes Affordable"
- Short sales
Many of these options are available to you without an attorney. So why have one? A bankruptcy attorney has comprehensive knowledge of all of the options, knows the potential challenges to any decision and can make your life easier by acting on your behalf and handling the details for you.