In some ways, the Chapter 7 bankruptcy process can help you keep your home. You may have fallen behind on your mortgage or have reduced ability to pay it monthly because you are struggling under the weight of your debts. Chapter 7 bankruptcy can help you start with a clean slate. Having many of your debts wiped out could increase your ability to keep up with your mortgage payments.
Many people worry that they can lose their homes in the bankruptcy process. The good news is that there is a homestead exemption that can help protect your home. There are only limited circumstances where your home can be taken from you as part of the Chapter 7 liquidation. The only way that you can lose your home is if you have excessive equity, or you fall behind on your payments. The Chapter 7 process would not completely stop foreclosure. The lender would not be able to take action against you while the automatic stay is pending, but they could eventually take your home, as your mortgage obligations are not eliminated, even if the lender cannot garnish your wages.
The Chapter 7 process can give you more breathing room to deal with the lender and possibly catch up on your mortgage payments. You would need to continue making payments while the bankruptcy case is pending. Even if a lender does discharge your debt in bankruptcy, they still have the right to foreclose on the home. Certainly, getting relief from debt would not hurt your ability to keep your home.
Contact a Memphis Bankruptcy Attorney Today
The Hurst Law Firm can give you objective advice about whether bankruptcy is right for you, and we can help you through the process. To speak with a bankruptcy attorney, you can message us online or call us today at 901.725.1000.
