If you are in the process of declaring for bankruptcy or are headed that way, it is clear that you are experiencing financial stress and turmoil that you are trying to remedy. We understand that San Diego homeowners in this situation have a heavy burden on their shoulders and many wonder what will happen to their house if they file for bankruptcy. Afterall, your home is most likely your largest asset and let’s be honest, it is your home! Most individuals in this situation do not want to lose their home, however, after reviewing your options in this article, you may come to the conclusion that walking away from your home may be the most streamlined way to handle this tricky situation. Today, Trusted House Buyers will give you valuable advice regarding what will happen to your San Diego house if you declare bankruptcy. We are here to help, so read on!
Factors that Determine If You Can Keep Your Home
If you are trying to bring some financial relief to your life, you are most likely wondering what your options are when you are headed into bankruptcy proceedings. Let’s take a look at the factors that determine if you will be able to keep your home through it all.
- The Type of Bankruptcy You File : There are two types of bankruptcies you can file, Chapter 7 and Chapter 13. There are many differences between filing a Chapter 7 or Chapter 13 bankruptcy, but the main difference has to do with the exemptions to which you are entitled. According to Findlaw.com, “Chapter 7 is the most common of the bankruptcy options. It’s available to people with low income who cannot afford to make any more monthly payments. The court sells all your assets (except exempt assets) and then pays your creditors.” Chapter 7 bankruptcy is also known as a “straight bankruptcy” where the bank liquidates all of your assets and wipe out your debts. This can truly help those in financial distress start over. Findlaw.com continues by informing us that, “Chapter 13 is a form of bankruptcy focusing on debt repayment. It allows you to keep your property. This gives individual debtors an opportunity to save their homes from foreclosure by allowing them to catch up on past-due payments.” Only those with a reliable form of income are allowed to file for Chapter 13, so there are obviously going to be vast differences than those filing under Chapter 7. Bankrate tell us that, “Chapter 13 (also called a reorganization) bankruptcy is a legal process that allows you to restructure your debt so that it’s more manageable. During the process, you and your creditors will design a repayment plan that lasts from three to five years. After you complete the plan, any remaining debts get discharged and you will be out of debt.”
- Let’s Talk Equity: Whether you are filing Chapter 7 or Chapter 13, there are ways to keep your home. Chapter 7 folks, the bank only looks at the equity of your home when deciding if your house is exempt under Chapter 7. What is interesting, is that many people filing for Chapter 7 have little or no equity in their home. Some even have negative equity in their property so they would be exempt and their home does not need to be sold. However, living in San Diego we know that house prices and property values historically rise each year, so this may not necessarily be the case for your San Diego home.
- Can You Afford Your Monthly Mortgage? : If you are continuing to make payments throughout the bankruptcy process, then you will be able to keep your home. Making mortgage payments and the ability to make continued payments is key. However, if your current income does not allow you to make consistent monthly mortgage payments, then the bank has the ability to foreclose on your home. This is when a big decision needs to be made. Bankruptcy allows homeowners to walk away from their home and the payments that have been a huge financial burden with no additional consequences in most cases. And truly, it may be the best choice to walk away from your San Diego home without your hefty mortgage payments causing more stress and anxiety.
Trusted House Buyers
If you are about to enter the dreaded bankruptcy process, let Trusted House Buyers step in and buy your house today. We have the ability to buy your house as-is which means your house can be in any condition. You will be able to walk away from the headache of court proceedings with cash in your hand for your home. We are usually able to make a cash offer rather quickly and have the ability to close within 10 days. Imagine a life free of the financial burden of your mortgage. Working with Trusted House Buyers may be the simplest option for you and your family. We are a family run business in San Diego with a reputable track record of working closely with our clients to help them navigate rather sensitive situations. We understand that each home and its inhabitants come with a unique set of circumstances that we are willing to work through together. If you are interested in learning more about how Trusted House Buyers can help you sell your home so you can avoid the headache of the bankruptcy process, give us a call today at 619-786-0973. We look forward to working together!