Foreclosure Options – Bankruptcy?
Although there are lots of foreclosure options, bankruptcy seems as though it’s the one that most homeowners have the biggest trouble with. Bankruptcy was created to protect individuals not hurt them. Things happen, many times out of our control. The most common bankruptcy filings are simple because someone gets sick. They can’t pay their medical bills and so they have no other option but to file. In real estate it works the same way. Life happens and sometimes it’s the best foreclosure option.
Though it should be one of your last resort efforts, bankruptcy is also an option that could save you from foreclosure. Personal bankruptcy comes in two types, Chapter 7 and Chapter 13. Chapter 7 will liquidate or eliminate debt, while Chapter 13 helps you pay off debt through court protection and supervision. Bankruptcy may seem like a simple or good solution to your financial struggles, but there really is more to it. It’s a very lengthy and complex legal process that can come with some consequences.
For most situations, it can be a great help, but remember to exhaust all of your other options before you get here. Since financial circumstances can vary greatly, you should seek the advice of professionals when determining if or which type of bankruptcy will be right for you. Speak with an accountant, financial planner, or a bankruptcy attorney. If you don’t have an attorney, then at least seek out multiple opinions before acting on the most extreme option.
Remember though, bankruptcy only stops the foreclosure for a certain period of time. Then, depending on which Chapter is filed, the home will either be sold, auctioned, or you’ll continue to make payments as before.
Cut Your Losses and Sell Your Home
Now obviously this isn’t an option if you owe more than the home is worth. However, often times selling the home is the best option for someone facing deep financial debt as long as they have equity. This allows you to gain up to 100% of the equity of your home, minus the costs to sell. Typically, this will be close to or more than enough to absolve the money owed on the mortgage. Though for many selling a home is easier said than done due to emotional attachment. This often allows one to ignore or avoid the realities of their financial hardship, and it encourages one to search for magic bullets until it’s too late to salvage their credit. It should be known that there are no magic bullets in these foreclosure options, but with hard work and planning can turn things around.
If you can assess your current financial circumstances reasonably, selling the home can even help you retain the ability to be a homeowner in the future. This is something you really have to think about when facing foreclosure. If you cannot find a way to avoid it now, it may be impossible to obtain a mortgage in the future. Don’t let your future or your equity be eaten up by past due balances and high interest loans, sell the home and move on. While it may be hard, consider that you may be able to get an even better home once you’ve improved your financial state.
Many of us will face financial hardships at some point in our lives, but you can protect your credit and your future by putting a good plan into action immediately. This quick action can help you preserve assets and eliminate debt. If you still end up facing issues, then these foreclosure options will help you keep your house or at least avoid the financial ruin that can prevent you from being a homeowner ever gain. Make sure you actively weigh all of your options and seek the advice of professionals to determine which solution will be best for you and your family.