During a Chapter 13 bankruptcy, you can enter into a repayment plan lasting between three to five years. If you have an outstanding mortgage balance, this process will give you time to pay off the debt, as an automatic stay goes into effect that prevents a lender from taking actions against you. In addition, if you have junior mortgages, Chapter 13 allows some homeowners to discharge them completely.
If you no longer care about living in your home, a Chapter 7 bankruptcy can be utilized if you are facing a foreclosure. The automatic stay will allow you time to find a new place to live. If you owe more money than the house is worth, filing Chapter 7 discharges deficiency amounts that you would have owed without filing bankruptcy, tax-free.
Recently, Bloomberg reported that in June foreclosure filings in the U.S. fell to levels seen before the housing bubble burst eight years ago.
While this is a good sign, properties with a default, auction or repossession notice still totaled 107,194 last month, as many people are still struggling to make mortgage payments. In some states like Maryland, foreclosure activity actually rose during the first half of 2014 over last year.
In total, the housing crisis has caused about 5.5 million people to lose homes since 2006.
How Can I Save My Home?
Aside from filing for bankruptcy, there are other options that you can utilize to save your home. We suggest talking to our foreclosure attorney, who may be able to work out a settlement or mediation agreement with your lender.
Remember, each state has different laws when it comes to basic foreclosure rights. If you are struggling to make mortgage payments, make sure that you do not ignore your situation—if you avoid addressing your situation and do not act sooner, it may become harder for you to keep your home.
If you have questions about bankruptcy and how it could help you save your home, contact our Washington DC and Maryland bankruptcy lawyer now for a free consultation.
Law Firm of Kevin D. Judd – Maryland and Washington DC bankruptcy attorney
Judd’s Judgment: In Maryland, the number of homes in foreclosure totaled about 2.4 percent of all homes for sale in May 2014.