Clark & Washington

Protect Your Home With These Tips

When it comes to filing for bankruptcy, a common concern is the possibility of having to give up one’s home. If you’re concerned about what will happen to your home when you file for bankruptcy, here are a few tips that will help you protect your home.

Chapter 13 Bankruptcy

If you’re filing for bankruptcy, it is likely that you are not caught up with your mortgage payments. To decrease your chances of losing your home, you should file for Chapter 13 bankruptcy. This will allow you to follow a repayment plan that will help you pay your debts in a more reasonable amount of time. Chapter 13 bankruptcy allows you to pay off your late payments for your mortgage over the designated length of your repayment plan. Usually, a repayment plan will last for three to five years. The length of the duration of the repayment plan mostly depends on your income and the requirements of the plan. If you succeed in making all the required payments, you will be able to prevent foreclosure and keep your home.

In order to increase your chances of success with the repayment plan, you should make the monthly payment as low as you possibly can. This will mean that your repayment plan will likely be five years. If you make all your monthly payments, you will demonstrate to the court that you have the ability to pay off the rest of your mortgage. Making the monthly payments will be easier if the amount you have to pay is lower. Also, you can always pay more than the amount of the monthly payment.

Chapter 7 Bankruptcy

Another way you can protect your home is by only filing for Chapter 7 bankruptcy if your home has little or negative equity. You can determine the equity of your home by subtracting the balance of your mortgage from the market value of your home. If your home has high equity, it is likely that you will lose it by filing for Chapter 7 bankruptcy because the home can be sold for a profit. This profit will then be used to pay off your debts. However, if your home has low or negative equity, it is exempt and will not need to be sold during the process of bankruptcy. If the equity of your home surpasses the exemption limit, you can keep it by paying the trustee your home’s market value.

As you can see, there are many things you can do to protect your home from bankruptcy. Just follow the tips discussed above and you will likely be able to keep your home. Call us today if you need help saving your house.

Image Courtesy of: Pixabay

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