Some people do not want to file for bankruptcy because they believe that it means that they have to lose everything. This is not the case though. There are actually many assets that you can keep if you go through bankruptcy proceedings properly. You can even keep your house most of the time. A New City, New York bankruptcy attorney from our firm can help you navigate this process and protect your assets.
Which Type of Bankruptcy Allows Me To Keep My House?
There are two types of bankruptcy commonly used by individuals. Based on your current income and assets, you can choose:
Chapter 7: This type of bankruptcy is a liquidation of assets. You sell off as much as you can and use that money to pay off your creditors. However, this does not necessarily mean that you need to sell off your house. In many cases, there is an exception carved out for your family home. If you have other properties, they will probably have to be liquidated, but your primary residence is usually safe.
Chapter 13: In this type of bankruptcy, you set up a plan to pay off your creditors over a period of three or five years. If the plan is accepted, you get to keep all of your assets. You just need to stick to the plan and continue making payments.
Can This Wipe Out Mortgage Debt if I File for Bankruptcy?
It is important to note that bankruptcy does not wipe out your mortgage debt. If you want to keep your home in Chapter 7 bankruptcy, your home needs to be paid off or your mortgage needs to be current. If you have fallen behind on mortgage payments, Chapter 13 bankruptcy is usually a better option.
Another creditor could also have a “security interest” in your home. This occurs if you put up your home as collateral for another debt. You need to continue making payments on that creditor’s debt if you want to keep your home. Bankruptcy proceedings will not wipe out that security interest.
How Can a Bankruptcy Lawyer Help Me?
A bankruptcy lawyer can help you in a few ways. They can:
Handle the paperwork: When you file for bankruptcy, you will quickly notice that there is a lot of paperwork that needs to be done. We love helping our clients with paperwork though, so just let us take care of this for you.
Answer your questions: Bankruptcy can also be confusing. You are probably going to have questions, so let our seasoned attorneys answer them for you.
Protect your assets: If you have a house or any other assets you want to protect during this process, we can do our best to help you with that.
Contact Us Before You File for Bankruptcy
If you need to file for bankruptcy, the Lauterbach Law Firm is here to assist you. Contact us today and learn more about how we can guide you through this process.