When you are facing bankruptcy and are struggling to make ends meet, something that you may be worried about is keeping your home despite your money woes. You have been in your home for years, and it’s where you feel comfortable. If you lose it, you worry about where you’re live or how you’re going to be able to get a loan to start over.
The good news is that there may be different ways to save your property from foreclosure and to keep it following bankruptcy.
Will you lose your home in bankruptcy?
The first question you need to ask is if your home is at risk of going into foreclosure or if it is in one already. If you’re current on your mortgage and are going into bankruptcy, you can choose to keep paying your mortgage and keep your property. The bankruptcy can address other debts you have, like credit debt, medical bills or loans instead.
If you have missed payments on your mortgage, you and your attorney may be able to renegotiate the terms of your mortgage, so that you can catch up on what’s owed over time. Chapter 13 bankruptcy is particularly good for this, since it can help address foreclosures.
In a Chapter 7 bankruptcy, you may be struggling to pay what you owe and may not have the money to continue paying your loan. In that case, a foreclosure is possible unless you’re able to negotiate time to make up payments or are able to start making your payments. A Chapter 7 bankruptcy takes care of unsecured loans, so mortgages may not be positively affected.
Can you stop a foreclosure once it has begun?
Yes, if a foreclosure is in process, you can still stop it. A bankruptcy will stop a foreclosure, along with any other collections activities, immediately. That’s great if you need some time to work out how to address the mortgage payments you’ve missed or if you’d like to renegotiate your loan with your lender moving forward. Your attorney can help you with all of this while you work through your bankruptcy together.