<span title="Bankruptcy!..................Foreclosure?">Bankruptcy!.................</span>

Question

I've heard some conflicting reports.

I've heard some people say that when you file bankruptcy you can keep your house. So my question is, why are people still losing their homes to foreclosure if they can file bankruptcy and keep it?

Is it:

A. They cannot afford their house payments even if they wipe out their unsecured debts

B. They tried to file bankruptcy more than twice in 7 years.

C. You really do lose your house in bankruptcy.

So what option would it be?

If a couple buys a home for $500,000 because they both make good money and then suddenly the husband loses his job and has to work at McDonald's, would that be an example of a bankruptcy AND foreclosure?

Answer 1

Bankruptcy is a legal proceeding under which people with default mortgages get a fresh financial start. The right to file bankruptcy is provided by the federal law in US. Debtors who declare bankruptcy under chapter 13 generally can keep their homes while paying off their debts under a court approved reorganization plan.

The disadvantage of filing for personal bankruptcy is that a record of this stays on the individual&#039;s credit report for 10 years. During the pendency of a Chapter 13 case the debtor is not permitted to obtain additional credit without the permission of the bankruptcy court.

There are other several options to stop foreclosure in the initial stages like including negotiating with the lender, reinstatement, loan repayment, loan modification, loan Restructuring, loan refinance, redemption&#039;s etc. Find out which is the best option for you to avoid foreclosure at the earliest.

Note:The American Bar Association has reported that 96% of homeowners who declare bankruptcy end up losing their home to foreclosure anyway. Bankruptcy is very unlikely to help you save your home. If you declare bankruptcy you will likely end up with BOTH a bankruptcy and a foreclosure on your credit report.