(US Law) If you are considering bankruptcy, you may be worried about losing your home. The good news is that bankruptcy may offer a path to not only paying down your debt, but also keeping your home. The bad news is that if you have missed mortgage payments or have otherwise fallen behind on debts, doing nothing can make the situation much worse.
Many people immediately think of Chapter 7 liquidation when they think of bankruptcy. one of the differences between Chapter 13 bankruptcy is that it can allow for you to get your finances in order while keeping your home and other property. An experienced bankruptcy attorney can help you make the determination between which type of bankruptcy is right for you. If you owe taxes in addition to owing payments to creditors, you may additionally need to seek the services of a personal tax attorney.
When you contact your attorney, they will most likely first want to know all about your financial situation. They may even give you a checklist of documents that you need to provide. It is absolutely essential that you are open, honest, and clear with your attorney. What you tell him or her directly impacts what you will be advised to do. The penalties for mistakes can be harsh. Using the wrong form of bankruptcy or failing to receive a plan confirmation or discharge can have serious legal and financial consequences.
You attorney may tell you that you do not satisfy the ‘means test’ and therefore must use Chapter 13. This isn’t necessarily a bad thing as Chapter 13 offers great protections for you home and property than Chapter 7 allows for. You will undergo a credit counseling session and a viable payment plan will be determined for you. If you pay back under the terms of your payment plan for its duration then you may receive a discharge on the remainder of your debts.
Chapter 13 bankruptcy can often be a better choice than straight liquidation under Chapter 7. For many, keeping their property is well worth entering into a payment plan regardless of how long the payments take place. However, if you are in debt you owe it to yourself to contact a lawyer. Bankruptcy law is a technical area where details are extremely important. You may even think that it is in your best interest to maintain ownership of your property, but after finding out the steps necessary, you may opt for a quicker resolution to your bankruptcy. It is essential that you use an expert who can explain the differences clearly to you and tailor a solution to your needs.
Remember, You Have Options
The bottom line is that you have options. Filing for bankruptcy may seem like a last resort; the end of the line. It’s important to know that an experienced attorney can help guide you through the process and choose the type of bankruptcy and situation that is best for you. Remember, simple mistakes in filing or fact can result in financial and legal consequences. Contact an experienced bankruptcy attorney today so that you can begin the process of getting back to financial help while still keeping your home.
About the Author
Paul Young is a Bucks County bankruptcy attorney who represents clients in Pennsylvania and New Jersey. He has been practicing for over 20 years.