Sometimes you hear from a neighbor, family member or even a co-worker that bankruptcy may help you save your home. But is it true, or just too good to be true? It is True!
Bankruptcy may bring a foreclosure proceeding to a halt, end harassment from debt collectors, and give borrowers time to make up missed payments and reorganize their finances. Most of the time, bankruptcy can also help mortgage borrowers save their homes permanently. Not everyone has the same type of situation though. For example, if the homeowner's biggest problem is not enough money, bankruptcy is not going to solve that. It works if the homeowner's has an ongoing income. If they have been making payments and who could be making payments again.
Chapter 13 is usually more effective at helping people keep their homes. It gives them time to repair their finances, usually three to five years, during which the court agrees to an income-based budget with monthly payments made to trustees. A chapter 7 bankruptcy delays the foreclosure. Borrowers still owe their mortgage payments but they can likely afford to make them because all the other debts have been discharged, but it is a very rare scenario for most homeowners.
For more information on bankruptcy in or around the Houston area, schedule a free meeting with a bankruptcy lawyer from the Rashid Law Firm by calling us at 832-209-8833 to schedule a free initial consultation. We are here to help.