Making Sense Of Your Financial Mess

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Making Sense Of Your Financial Mess

A few years ago, I realized that I had a real problem. I hadn't been able to pay my bills in awhile, and I was left wondering what to do. Bill collectors called me non-stop, and I wasn't sure how to go about making things right. Fortunately, a friend of mine who understood my mess explained that it might be a good idea to meet with a bankruptcy attorney. After I went, I was blown away with the level of care and understanding I was given. This website is all about helping other people to see the light, even when they are in the midst of battling a hectic financial situation.

Should You Keep Your Home When Filing Chapter 7 Bankruptcy?

Qualifying for Chapter 7 bankruptcy is something that is based primarily on your income, and most people prefer using this branch over Chapter 13, because Chapter 7 does not require you to repay unsecured debts. If you qualify for Chapter 7, you may have some decisions to make about your assets, and one big decision is whether you should keep the house you have. Here are some factors to evaluate if you have to make this decision.

Are you even able to keep it?

The first thing to understand is that you may not even have a say in whether you keep your house or not. If your house has a lot of equity in it, the trustee may tell you that you cannot keep it. In this case, the trustee would take your home from you, sell it, and use the proceeds to pay off some of the debt included in your bankruptcy estate. If there is not a lot of equity in the house, the trustee most likely will not want the house. In this case, you can decide if you want to keep it or not.

Will your lender reaffirm the loan you have?

If you decide you want to keep your house, you will need to take an additional step to find out if you can. This step involves talking to your mortgage lender to see if they will agree to reaffirm the debt. Reaffirming the debt simply means that it will not be included in the bankruptcy and the terms of the debt will continue as normal. If the lender will reaffirm your debt, you can stay living there and continue to pay your normal monthly payments.

There are times when lenders may not agree to reaffirm house loans, though, but this typically happens only when a person is behind on their payments. If you are certain you want to keep your house when filing for bankruptcy, you will need to make sure you do not skip any payments on your loan.

How hard would it be to buy a house after bankruptcy?

There may be times when people are not sure whether to keep their homes or not, and there is one important factor to consider with this. If you go through with bankruptcy, you may have a very hard time getting a loan to buy another house afterwards. For example, if you want to buy a house with a conventional loan, you will have to wait four years from the date of discharge. Because of this, you may want to keep the home you currently have to avoid having problems buying another one in the future.

If you are in debt and cannot find a way out, filing for Chapter 7 can be very beneficial. You can learn more about bankruptcy by visiting with a lawyer such as Clinger Richard S.