Recent times have caused financial distress for many Florida residents. You may have lost a job, had trouble paying bills and accumulated a high amount of debt that you are now unable to pay.
Bankruptcy is often a smart and viable option for people in this situation; however, one of the biggest reasons people hesitate to file for bankruptcy is fear of losing their home. The good news is that there are ways to keep your home even if you file for bankruptcy.
You must first decide if you will file a Chapter 7 or Chapter 13 bankruptcy. A Chapter 7 bankruptcy gets rid of all of your eligible debts, while in a Chapter 13 bankruptcy, you set up a payment plan to pay off your creditors.
Chapter 7 bankruptcy
If your eligible debts are discharged through Chapter 7 bankruptcy, it will be easier to make your mortgage payments. Your ability to keep your home with Chapter 7 bankruptcy depends on the status of your mortgage and your relationship with your mortgage company.
In general, if you are caught up on your mortgage payments and have some equity in your home, the chance of keeping your home increases. If you are behind on your mortgage payments, contact your mortgage lender and try to set up a plan to get caught up.
Do this before you file for bankruptcy. The key is that you want to demonstrate to the court that you will be able to make your mortgage payments after bankruptcy.
Chapter 13 bankruptcy
If you choose Chapter 13 bankruptcy with a payment plan, you will likely keep your home. Chapter 13 bankruptcies are often a better option for people who want to keep their home or other assets.
Your Chapter 13 payment plan will include your mortgage payments as part of the plan. Be sure if you choose this option that you can make your payments, since you still risk losing your home if you do not follow the payment plan.
There are many other factors to consider, and everyone’s financial situation is different. Before making any decisions, it might help to talk to a bankruptcy attorney.