Chapter 7 is a discharge of your debt which means there is no legal responsibility for you to repay the amount owed.
Certain debt is non-dischargeable such as taxes, student loans, domestic support obligations, divorce debt and government fines and debt.
What is Chapter 13
Chapter 13 is a repayment of your debt over a three or five year period
The amount of your repayment is based on your monthly disposable income, equity in property and income from the means test.
What is foreclosure
Defined by Wilkipedia: Foreclosure is the legal and professional proceeding in which a mortgagee or other lienholder, usually a lender, obtains a court ordered termination of a mortgagor’s equitable right of redemption.
What happens if I fall behind on my mortgage
Stay in touch with your mortgagee
FHA loans with 80-20 loans purchased in the last 5 years are provided additional protection with the newly passed bill
Provide a statement to your mortgagee of your hardship and send in all financial information such as paystubs, tax returns to help assess the possibility of refinancing
Avoid using “mortgage specialist” which insist on you paying them and not your mortgage.
Filing chapter 13 will allow you to pull your arrears into your plan, stay in your home and avoid foreclosures.
What is a short sale?
Defined by Wilkipedia: short sale is a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold.
In a short sale, the bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor. This negotiation is all done through communication with a bank’s loss mitigation or workout department. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender, sometimes (but not always) in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale. Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market and the borrower’s financial situation.
A short sale typically is executed to prevent a home foreclosure, but the decision to proceed with a short sale is predicated on the most economic way for the bank to recover the amount owed on the property. Often a bank will allow a short sale if they believe that it will result in a smaller financial loss than foreclosing as there are carrying costs that are associated with a foreclosure. A bank will typically determine the amount of equity (or lack of), by determining the probable selling price from a
Request A Free Consultation
Latest from Blog
President Biden on Bankruptcy Reform
November 14, 2020
On Saturday, November 7th, Joe Biden was declared the winner of the presidential election by all major news outlets. According...
Criminal Records In Bankruptcy
November 11, 2020
Filing for bankruptcy is available to everyone including people with criminal records. Filing for bankruptcy with a criminal record can...
Discharging Student Loans in Bankruptcy
October 15, 2020
With student loan debt topping over $1.6 trillion, it seems like a dream to ever be freed from student loan...