Can you file for bankruptcy while fighting a foreclosure?

Question by paisa11369: Can you file for bankruptcy while fighting a foreclosure?

Best answer:

Answer by loanmasterone
Yes you may file for bankruptcy protection and include your home in the bankruptcy.

You should understand the bankruptcy laws and what you are protecting or the type bankruptcy you should file for.

I will briefly explain them as I know them.

Chapter 7
This bankruptcy you have decided that you can no longer pay any creditor or you are so far behind that you are offering all assets to pay off any possible debts. Once this bankruptcy take place all your assets will be sold off or used to pay off as many creditors and possible. First to be paid would be secure debts such as the mortgage on the house secured by a note and deed of trust. Then all other debts would be paid if there is anything left such as credit cards and other secured debts.

You would be able to have enough funds to live off, as they bankruptcy will not leave you without means to live.

Chapter 13
This bankruptcy you are saying that you want to keep the assets you have and is willing to accept a plan to pay off your creditors. You will be assigned a court trustee that will monitor your monthly payments to each creditor. This trustee will set this payment plan up with you and your creditors. This could be that you would pay a reduced monthly payment to some, while continue paying the same to others.

With this type bankruptcy you would be able to keep all your assets, however, you would be on a court ordered payment plan to your creditors.

There might be some variance of these two that you might be able to utilize, but these are the basics.

Either will be reflected as a negative on your credit report for more than 5 years

For all tax and legal matters you should consult with your tax consultant and your attorney.

You might be better off attempting to get your mortgage loan modified with your lender.

This will save you the cost of an attorney. You can represent yourself, however this is not very wise.

I hope this has been of some benefit to you, good luck.

“FIGHT ON”

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