Hi, this is Derik Lewis with Lawyers Realty Group. We are here to help you with all of your real estate and short sale needs in this rocky Southern California housing market. I wanted to discuss a few things concerning bankruptcy because I’ve gotten quite a few inquiries this past week. One important thing to remember is that bankruptcy is not going to save you from foreclosure; if you are looking to stop the foreclosure on your home, you can always consider doing a short sale.
You can file a chapter 7 or chapter 13 bankruptcy claim; the U.S. Trustees website will break it down for you, but essentially a chapter 7 is a complete liquidation. A chapter 13 bankruptcy is a reorganization. You can notify all of your unsecured creditors that any amount you have over necessities in income will be allowed towards those creditors for the next 3-5 years. If you complete that plan, the rest is forgiven. Some people may make too much money to qualify for a chapter 7 bankruptcy, so they are forced into doing a chapter 13.
A lot of people have asked when they can file and how it may affect a foreclosure. If you are looking to postpone the foreclosure sale and protect assets and liability, you’ll want to file at least two business days before the foreclosure date.
Bankruptcy is not an alternative to foreclosure because the lender can ask to continue with the foreclosure; if you are looking for an alternative, you can always consider short selling your home. At Lawyers Realty Group, we work in coordination with the bankruptcy filing and we reach out to the lender as your lawyer and start discussing early on the opportunity for a short sale. This buys you extra time, but also gives you the benefit of not affecting your credit as much. If you would like more information about short selling your home, or are wondering if you qualify to short sell your home, please feel free to check out our website, email us or give us a call.