If you are facing hard times and the possibility of foreclosure, you may want to consider filing for Chapter 7 bankruptcy. Although it is not a permanent solution to foreclosure, it can delay the process. So if you have decided to give up your home later, rather than sooner, Chapter 7 may be for you. To explore this option thoroughly, you should schedule a consultation with a Dallas bankruptcy attorney who is familiar with the process and has vast knowledge of Texas laws.
How Chapter 7 Helps When Foreclosure Looms
When you file for Chapter 7, you may be able to:
- delay foreclosure for several months; and
- get a significant amount, if not all, of your debt canceled so you can get a fresh start after foreclosure.
There are many additional benefits of filing for Chapter 7, and they all depend on your unique situation. Before you meet with an attorney, it would be a good idea to gather all pertinent documents and prepare a list of questions you would like to ask. This way, your attorney will be able to assist you better.
Handling Liabilities When Drowning in Debt
Understand that with a Chapter 7 filing, you can deal with many liabilities as you go through foreclosure or even if you decide to fight the process. Besides credit card debt, you may be able to say goodbye to medical bills and any judgments from certain lawsuits.
Keep in mind that bankruptcy is not the solution for everyone. Before taking the plunge, be sure to discuss the following with an attorney:
- how bankruptcy may affect your credit;
- rebuilding your credit after bankruptcy; and
- the benefits of Chapter 7 vs. Chapter 13 amid foreclosure.
If your goal is to save your house from foreclosure, Chapter 13 may be a better option, but you could still benefit from filing for Chapter 7. Because bankruptcy cases can be very complex and often difficult to interpret, it is imperative that you speak with an attorney who can put all the legalese in layman’s terms.
How Chapter 7 Can Help You Keep Your House
If you have not missed any payments on your first mortgage, but you have so much debt that you will soon fall behind, a Chapter 7 filing can help you save money. If your credit card debt can be canceled, for example, you could have more money to continue paying that first mortgage.
Also, if the value of your home has dropped below the value of your first mortgage, then a Chapter 7 filing could wipe out, albeit temporarily, your need to make payments on a subsequent mortgage. The reason behind this is that bankruptcy eliminates debt under a second or third mortgage, and whoever holds the second or third mortgage most likely would not foreclose because proceeds from a foreclosure sale would go to the first mortgage holder.
When You’re Undecided on Foreclosure
If you have not decided whether to fight for your home, keep in mind that you can always put things on hold by filing for Chapter 7 with the guidance of an attorney. When you file, foreclosure proceedings must stop. Proceedings will not stop forever, but a court order automatically will issue a halt. This means creditors will be barred from trying to collect debt, unless permission is sought and granted from bankruptcy court, which can be time-consuming.
Your best course of action would be to talk things over with your attorney, weigh the pros and cons of keeping your home vs. foreclosure, and do what you feel is right for your situation.
Contacting a Dallas Bankruptcy Attorney
At Warren & Migliaccio, our goal is to protect you and your family so that you can take the necessary steps to plan proactively for your future. When financial circumstances outside of your control threaten your wellbeing, take control of your situation by contacting ourDallas law firm. We’ll explain bankruptcy rules of procedure and guide you through the legal process so you can make informed decisions and choose the best course of action. If a personalized, teamwork-driven approach sounds like what you need for your case, call 1-888-584-9614 today to contact us. We’re here to help.