Home is a necessity that forms part of the shelter that is very essential. Many lenders or creditors might initiate home foreclosure procedures. It can be traumatic and stressful when the home is on the verge of being foreclosed. The institutions and the bankruptcy code consider home as an essential necessity and hence, there are multiple ways a good attorney https://www.recoverylawgroup.com/bankruptcy/ can suggest safeguarding the borrower’s home during bankruptcy or foreclosure attempts.
Mortgages pay off
The mortgage on the house is not waived and to keep the home, one must continue paying mortgages whether it is Chapter 7 or Chapter 13 bankruptcy. Declaring bankruptcy cannot have a free home offer with it. Yes, some of the unsecured loans and other debt liabilities can be diluted significantly but consistent payments are necessary to keep pace with the necessary assets like home as well.
During foreclosure attempts or threats to take over a home, bankruptcy helps in maintaining the status quo and completely nullifying any sort of bullying or harassment from the lenders. These can be traumatic and stressful times and this status quo helps borrowers significantly at least psychologically and temperamentally. Some features like Homestead exemption safeguard the existing investment in your home making it practically likely for a borrower to payout the home mortgage. Dial-in on 888-297-6203 to know more about the homestead exemption and how it can benefit you.
Home equity calculations
Home equity calculations can get messier and tricky many times. The current market value of the home and the equity paid along with the homestead deduction have a major say in wiping on home equity benefits. In most circumstances, if the market value is lower than the home financed value and the home equity is lower than homestead exemption, there are chances of having an upper hand while applying for bankruptcy via Chapter 7 or Chapter 13. However, if the home equity is way higher, a considerable amount of the same shall be equated to other debts to ensure fair treatment amongst other lenders.
It is a very tricky calculation of home equity, and home market value and is best left to the experts. Especially, when you are staying in Los Angeles & Dallas, TX with ever-so-dynamic price changes. Dial 888-297-6203 to know more and get the right math behind your home equity.
Defaulted mortgage payments, what next?
If the mortgage payments default, Chapter 7 bankruptcy makes it very difficult to claim the house. The house will more likely be liquidated unless the current market value of the house has been depreciated significantly. However, Chapter 13 bankruptcy provides for a better payment plan that helps to secure the house based on future income. The provision for spreading lapsed or defaulted mortgage payments over a period of 3-5 years is very handy, especially if the home has appraised at a good multiple since the mortgage.
Sometimes, it is worth letting go of the home to minimize complications. It is not an easy decision to make but it is something that must be analyzed on a case-to-case basis. Aspects like deficiency judgments, the value of the home, home equity calculations, etc., form a key part of this decision-making. Log on to https://www.recoverylawgroup.com/bankruptcy/ to clarify all your doubts at once.