Chapter 7 Bankruptcy and Foreclosure Defense

If you are deep in debt and have no means of paying for them, then you may be a good candidate for filing Chapter 7 bankruptcy. However, you have to consult with a bankruptcy lawyer if this is indeed your best option. Filing for bankruptcy is a good way to avoid foreclosure if your mortgaged property is included in the state or federal exemption. If it is not, and you have substantial equity in the property, then you may be better off with a Chapter 13 filing.

The advantage of Chapter 7 is that it is over in a shorter period, approximately 6 months. Chapter 13 can take years, up to 5, depending on the arrangement you have with your creditors. Filing for Chapter 7 can also help you avoid foreclosure by giving you a little time to come up with a way to pay off your lender, but it is only a temporary fix unless it is your primary homestead. If it is, you will be able to keep it no matter what it is worth under Texas or Iowa state law. According to the website of Erin B. Shank, P.C., military families may be vulnerable to bankruptcy because of medical conditions or physical disability of the member of the military.

Chapter 7 is basically a liquidation plan. This means that you are asking the courts to assign a trustee to help you liquidate what assets you have to pay off your creditors. Unsecured debts such as unpaid credit cards are low on the list of priorities; the trustee will first pay off secured debts. However, if you have non-exempt property, the trustee will sell them off to pay your debts. If you want to keep your property, Chapter 13, which is a restructuring program, may be your best bet. You pay off your debts and keep your property by agreeing to pay for them over an extended period.

Foreclosure defense will depend on your circumstances. Filing for bankruptcy is indeed a viable option. However, many complex issues may affect your decision. Consult with a bankruptcy or foreclosure defense lawyer in your state before you make a choice

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