Another tip from your Seminole County foreclosure and Seminole County short sale realtor. Although bankruptcy is an option for certain Seminole County foreclosure participants, it is usually the last ditch defense to a foreclosure. By filing for bankruptcy, the federal Bankruptcy Code’s “automatic stay” comes into effect, which immediately stops all efforts to collect a debt, including foreclosure and including the court ordered foreclosure sale of the debtor’s home.
If your problem centers around your home and difficulties with making the mortgage payment, then bankruptcy typically is not your best bet. There are other alternatives to foreclosure that are not as damaging to your credit. On the other hand, if making the mortgage payment is a problem, and in addition, you have extensive consumer debt like credit card, then you might want to explore the option of bankruptcy.
The two basic options for a consumer bankruptcy are Chapter 7 and Chapter 13. Chapter 7 is liquidation and Chapter 13 requires a repayment plan. To be eligible for Chapter 7, the consumer must pass the “means test,” which requires that before they can file for Chapter 7 bankruptcy, they have to show that they make less than a certain percentage of the area’s median income, which (as of early 2010) in the Orlando area is approximately $41,000 per year in gross income for a 1 person household, or approximately $52,000, for a 2 person household. Otherwise, the consumer must go through Chapter 13, which allows the consumer to come up with a repayment plan and ask the Court to adjust the terms of your loans, including those of your mortgage lender.
If you think bankruptcy may be an appropriate option for you to avoid foreclosure, you should speak with an attorney. Richard can refer you to a local bankruptcy attorney upon request.
