Bankruptcy can provide a way to have a fresh start with your finances, but does it allow you to keep your home? Bankruptcy may help in some cases, but it may not in others. To find out if you can keep your home if you file, your bankruptcy attorney may ask you some questions. From there, he or she can determine if you can keep your home or not.
Questions the Attorney Asks
To find out the answers to your questions, you should meet with a lawyer and talk about your unique situation. When you attend this meeting, here are the questions the attorney may ask you.
1. How much equity do you have in the home?
The amount of equity you have in the property affects whether you can keep the home or not if you use Chapter 7 bankruptcy. If you use Chapter 13, the equity amount generally plays no role in the decision.
2. Are you behind on the payments?
Being behind on payments might be the reason you are seeking advice from a lawyer for this situation. If so, the only branch you can use for relief will be Chapter 13. Chapter 7 does not offer aid to homeowners who are behind on their payments unless they can catch up on them right away.
3. Do you have a second or third loan on the house?
A second or third loan on the house often puts a homeowner in a position where they owe more on the property than its current worth. Chapter 7 cannot provide a lot of relief for this situation, but Chapter 13 can.
4. What is your income amount?
Asking about your income amount also matters, as it affects which branch you qualify for.
The Differences Between Chapter 7 and Chapter 13
Chapter 13 bankruptcy is the best choice for homeowners who are facing foreclosures or that are falling behind on their loans. Chapter 7 is better for people who are falling behind on all their other bills but are still managing to pay their mortgages on time.
After meeting with an attorney and discussing these things, you should know if you can keep your home if you file. You may also know which branch of bankruptcy you can use for relief, as well as the other benefits it will offer to you. To learn these things, schedule a visit with a bankruptcy law attorney today.
