Many of us have been there: having thousands of dollars in credit card bills or medical bills and not knowing how they will get paid. Maybe you’ve been laid off from your job or you’ve been injured and not able to work for a period of time. Bankruptcy is a way for a person to make a fresh financial start. But it can be a scary proposition, especially if you’re worried about losing your home.
The decision to declare bankruptcy should not be taken lightly and is often made during a stressful time in your life. There are three factors that determine whether you keep your home after bankruptcy. These include:
- The chapter of bankruptcy you file.
- How much equity you have in your home.
- If you can afford your monthly mortgage payments.
Chapter 7 bankruptcy
In Chapter 7 bankruptcy, most of your debts are wiped out and there is a liquidation process. You may be able to keep your car, certain personal property and you home if there is little equity in it.
Chapter 13 bankruptcy
A Chapter 13 bankruptcy is a structured repayment plan for your debts. It uses your income to pay off your creditors for the amount you owe.
A legal professional who is skilled in bankruptcy understands how the process works and would be happy to review your situation. They have years of experience in helping you determine what your best option will be that will have the least impact on your situation. They understand that it is important that you make a fresh financial start and will do everything they can to make that happen.