By Robert J. Semrad | Published October 30 2015 |
Keeping Your Home Through Chapter 13 Bankruptcy
Homeowners throughout Georgia are finding themselves in difficult financial situations. If you are in danger of losing your home to foreclosure, you are probably considering every possible choice. Depending on your income, your assets and the amount of equity you have in your home, you have different options.
Loan modification may seem like the easy option, but it can leave you struggling to pay your other bills.
Selling your home can be hard on your family and may not leave you with much money if you have a large mortgage.
Chapter 7 bankruptcy is a great option for people who do not have much equity in their home. Georgia state bankruptcy exemptions let an individual keep up to $21,500 of equity in their home. Couples can combine this to $43,000. Equity is determined by subtracting the amount you owe on the home from the home’s value. If this number is too high, you cannot protect your home through a Chapter 7 filing.
Chapter 13 bankruptcy is a tool designed to allow people to keep their home and their vehicles while reducing their debt. This type of filing is normally known as “debt reorganization.” It works by minimizing your other bills so you can focus on paying your mortgage.
In a Chapter 13 proceeding, you do not have to give up or sell any property. If you qualify to participate in this type of arrangement, you will be able to keep your home. To qualify, you must earn a steady income that is enough to make the required payments.
During debt reorganization, you work with a bankruptcy attorney to create a repayment plan. This plan deals with all of your unsecured debts such as student loans, medical bills and credit card debt. Your attorney will work with you to calculate how much money you have left over after paying your mortgage and buying essentials each month. This “disposable income” is how much you will need to pay each month. After three to five years, the plan ends and most of your unsecured debts are cancelled.
During the course of the repayment plan, your home cannot be foreclosed on as long as you make the required payments. Once the plan ends, some of your other bills will be eliminated, making it easier for you to stay current on mortgage payments.
An experienced Atlanta debt consultant at DebtStoppers will meet with you one-on-one for a free debt evaluation. If you decide that Chapter 13 bankruptcy is right for you, our firm will assist you every step of the way. To schedule your free consultation, call us now at 678-673-2142 or contact us online.