If you want to file for bankruptcy, the one thing holding you back may be the horror stories of people losing their homes in the process. While this, unfortunately, can happen, these instances are few and far between, as there are many factors that influence what happens to the property during the process. As such, it’s vital to understand what can impact whether or not you lose a home during the process. Keep reading to learn more and discover how a Memphis TN, consumer bankruptcy lawyer can help you navigate the complexities of this situation.
What Factors Will Influence If You Could Lose a Home?
One of the significant factors that influence what happens to your home during bankruptcy is what type of bankruptcy you file. If you choose Chapter 7 and have a considerable amount of equity in the property, it is a risk that you could lose the home if you can no longer afford the mortgage payments after the fact. If you have no equity, you’ll be able to keep the home, as trustees will not sell a home without value. Similarly, if you can’t make the payments after filing, you may be stuck with a deficient balance. As such, you will lose your home and face collections.
However, if you choose Chapter 13 bankruptcy, your home is legally protected from foreclosure as long as the petition to file for bankruptcy is filed with the court before the foreclosure date. Also, this method allows you to catch up on your mortgage payments, as you’ll likely receive a 0% interest rate.
What Should I Do if I Want to File for Bankruptcy?
If you want to file for bankruptcy, it’s in your best interest to contact an experienced attorney who specializes in this process.
In the event you file for Chapter 7 bankruptcy only to learn you may lose your home, it’s likely you may not be able to change your mind and have your case dismissed, as the judge keeps the best interest of the creditors in mind during this process.
As such, it’s essential to consult a lawyer who can help you determine the best course of action for your circumstances, as they will be able to help you make the best decision. Unfortunately, this can be a complex and confusing process, so ensuring someone who is familiar with the law and the pros and cons of each option is vital to protecting your most valuable assets.
At the Arnold Law Firm, our dedicated legal team can help you. We understand it can be hard to choose between dismissing debt and worrying about losing your home. As such, we will do everything possible to help you achieve the best possible outcome for your situation. Contact us today to learn more about how we can assist you.