Facing Foreclosure ???

Facing Foreclosure and Bankruptcy

If you are facing foreclosure and the loss of your property you may want to consider your options in bankruptcy. There are many options available to you. If you are losing your home and the house has not gone to foreclosure sale yet, you can file a chapter 13 bankruptcy. This would allow you to pay the past due mortgage payments over time and save the home.

If you do not want to save the home but are afraid of losing your equity, you can file a chapter 13 bankruptcy with a sales plan. If you home is foreclosed your will most likely lose a lot or all of your equity. Generally, banks do not care if you make a profit from the home sale and are only interested in getting their money back. If you file a chapter 13 bankruptcy with a sales plan you can stop the foreclosure and sell the home for full market value. This way the bank gets their money back and you can keep the equity or use the equity to pay off other debts.

In some situations it can be advantageous to file a chapter 7 bankruptcy and allow the Chapter 7 Bankruptcy Trustee to sell the property for you. By doing this you can get full market value and preserve or save your equity and pay off other debts. The Chapter 7 Bankruptcy Trustee, and not you, has the power to stop the sale and get the most reasonable price for the home. The property would temporarily belong to the trustee who, generally speaking, has a lot more authority and power over bankruptcy assets. Otherwise, if the house went to foreclosure, you may end up with a deficiency balance and now owe more money or you could end up with little or nothing at all. If there is equity in your home and there is a threat of you losing it bankruptcy may be in your best interest.

Whether you file a chapter 7 bankruptcy or a chapter 13 bankruptcy the Bankruptcy Court will immediately impose the automatic stay which is like a restraining order against all of your creditors. This will allow you time to make a rational decision and sell your property for the full value instead of losing the property to foreclosure sale or having to sell it fast at a greatly reduced price.