One of the greatest stresses a family can face during difficult financial times is the threat of losing their home. At The Law Office of Kim Covington, we understand how serious this issue is, and we are prepared to help you fight to keep your home out of foreclosure even if your only option is to file for bankruptcy.
There are many myths surrounding personal bankruptcies, and one of them is that you will always lose your home to repay creditors. While it’s true that this can happen, automatic foreclosure is not set in stone. According to NASDAQ, some common factors can help you avoid foreclosure in a bankruptcy, including the following:
- The type of bankruptcy you file for.
- Being able to continue making mortgage payments.
- The amount of equity in your home.
You stand a much better chance of holding onto your home if you file for Chapter 13 bankruptcy, rather than Chapter 7–although it is possible in some cases to keep your home after a Chapter 7 discharge. With Chapter 13, your debts are restructured in a payment plan to help you repay them in a manageable amount over a period of time, usually five years. This payment plan will often include your mortgage payment. It is crucial to make your mortgage payment on time each month, or you risk triggering a foreclosure.
The chances of losing your home are greater if you have significant equity, especially if you are filing for a complete discharge of debts through Chapter 7. Home equity is often used to repay debts in a bankruptcy.
For more information, visit our foreclosure page.