When homeowners are in over their head in debt, they often face bankruptcy and losing their home. It’s best for them to talk to a bankruptcy lawyer as soon as they fear they won’t be able to keep up with their monthly payments. Many people wait far too long to meet with a lawyer out of embarrassment and fear. They shouldn’t worry. Their Foreclosure Attorney in Royal Palm Beach has heard every story before. It’s important for them to hire a lawyer, because if they make the right choices they may be able to keep their home.
The first decision that a person has to make is whether they will file for bankruptcy under Chapter 7 or Chapter 13. Once a Foreclosure Attorney in Royal Palm Beach has filed for bankruptcy under either law, all foreclosure proceedings stop. However, they might not stop permanently or the person could lose their house as part of the bankruptcy process. The best chance a person has is if they are current on their mortgage payment.
Chapter 7 is known as the fresh start bankruptcy law, because within six months the debtor’s debts are discharged and they can go about their life. However, in order to file under Chapter 7, a person’s annual income has to be below the median income for their state. If it’s higher they have to use Chapter 13. Under Chapter 7 all of a person’s assets must be sold and the proceeds dispersed to creditors. Some assets are protected from bankruptcy. This varies from state to state. A Foreclosure Attorney in Royal Palm Beach will know if a debtor’s home can be protected. Once the other debts have been discharged, the homeowner will probably be able to pay their mortgage more easily.
A Chapter 13 bankruptcy is much different. It’s used when a person has a reliable income each month. The bankruptcy trustee sets up a household budget that the debtor has to live within. Everything else is given to the trustee who pays off creditors. Those with secured debt such as mortgage companies get paid first. After five years, all of the remaining debt is forgiven. So the homeowner will have their home and a reduced debt level. A Foreclosure Attorney in Royal Palm Beach will tell them to carefully complete the program, because the debts aren’t forgiven until the very last payment.