Many people who are having financial problems have gotten behind on their monthly bills, sometimes including their mortgage payment. When people get sufficiently behind on their mortgage payment, their lender has the option of foreclosing on their home, meaning that the bank will take possession of the house and sell it order to satisfy the homeowner’s debt. For many people, their home is an extremely important part their lives, often representing a significant investment of time and money. As a result, it is not surprising that many people who are facing foreclosure wonder whether bankruptcy1 will be able to help them keep their home. While every case is different, the good news is that in many cases bankruptcy can prevent foreclosure and allow a homeowner to catch up on their mortgage payments while staying in their home. The best way to determine whether you may be able to benefit from filing for bankrupt y is to discuss your options with an experienced St. Louis Chapter 7 bankruptcy lawyer as soon as possible.
Chapter 7 Bankruptcy
Many people who consider bankruptcy are concerned that their home will be sold off in a Chapter 7 bankruptcy. After all, the fundamental concept behind Chapter 7 bankruptcy is the liquidation of a debtor’s assets in order to pay off creditors. Fortunately, bankruptcy law provides debtors with a number of exemptions which allow them to exclude certain classes of property from the estate included in bankruptcy. Among these exemptions is the homestead exemption2, which in Missouri allows a debtor to exempt up to $15,000 of equity in your home. This means that if you have $15,000 or less of equity in your home the bankruptcy trustee will likely not sell your home, as there will not be anything left over to distribute among creditors.
For people who are facing foreclosure, one of the ways that Chapter 7 bankruptcy is through the automatic stay that is imposed the moment a person files for bankruptcy. The automatic stay is an injunction that prevents creditors from engaging in collection activities, including initiating or continuing foreclosure. In many cases, the protections of the automatic stay can provide a debtor with additional time that can allow them to get current on their mortgage or make alternative arrangements. In addition, because Chapter 7 bankruptcy can eliminate many types of unsecured debts, it often makes it easier for homeowners to stay current of their mortgage in the future.
Contact a St. Louis bankruptcy attorney today to schedule a free consultation
Anyone who is facing foreclosure or is getting behind on other financial obligations should discuss their options with an experienced bankruptcy lawyer as soon as possible. To schedule a free consultation with one of our lawyers, call the Law Offices of Kenneth P. Carp today at (314) 526-0879.