New York Bankruptcy Attorney
If at all possible, it's best to avoid foreclosure on your home. If you lose your home through foreclosure, your credit will be adversely affected and a record of it will appear on your credit report/FICO for 10 years. Additionally, it can take 4 to 6 years to obtain financing again through the Federal Home Loan Mortgage Corporation (Freddie Mac) or the Federal National Mortgage Association (Fannie Mae). Understanding the financial and legal issues involved in home foreclosure is essential in evaluating the options available to you. If you've fallen behind on your mortgage or are struggling to pay your monthly installment and other bills, contact a Bankruptcy attorney at The Castiglia-Rubinstein Law Firm today.
Avoiding Foreclosure — Considering Your Options
Depending on your financial situation and the specifics of your mortgage, one of the following may be your best option for avoiding foreclosure:
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is designed to help people who are unable to pay their existing debts. The purpose of filing a Chapter 7 bankruptcy case is to obtain a discharge of your existing debts (in other words, to wipe out your current debts and no longer have to be held responsible for your bills).
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Chapter 11 Bankruptcy
Chapter 11 bankruptcy is a form of bankruptcy reorganization available to business owners individuals, corporations and partnerships. It has no limits on the amount of debt, as Chapter 13 does. It is the usual choice for a businesses seeking to restructure their debt.
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Chapter 13 Bankruptcy and Foreclosure
People who don't qualify for Chapter 7 bankruptcy usually have a choice to file under Chapter 13. Unlike Chapter 7 bankruptcy which wipes out unsecured debt, Chapter 13 will require you to repay a percentage of what you owe over a 3- to 5-year period, depending upon your net monthly disposable income. It will be necessary to submit a repayment plan for approval by the court and your creditors.
As part of your repayment plan, you can include past-due mortgage payments and reduce other monthly bills into one manageable payment. Accordingly, people who file Chapter 13 bankruptcy are often able to avoid foreclosure. Additionally, once you file for bankruptcy, an automatic stay is placed on any foreclosure or collection actions on the part of banks and creditors. This may allow you the time you need to save your home. There may be dire tax consequences if you foreclose on a mortgage. Contact Bankruptcy help attorneys at The Castiglia-Rubinstein Law Firm today to discuss your options.
First and Second Mortgages and Foreclosures
If you have a second mortgage on your home or you have taken out a home equity loan, certain considerations come into play if you decide to pursue a short sale in lieu of a foreclosure. In general, if you decide to work out a short sale with your lender, the bank can ask you to pay the difference between what you sold your house for and what you owed on your original mortgage.
However, if you have a second mortgage and aren't protected by anti-deficiency provisions, the lender can pursue you for any losses it takes on your second mortgage. Depending on your situation, your second mortgage may be dischargeable in bankruptcy or there may be dire tax consequences if you foreclose on a second mortgage. Contact Bankruptcy help attorneys at The Castiglia-Rubinstein Law Firm today to discuss your options.
Contemplating Bankruptcy?
Contact Castiglia-Rubinstein & Associates Today.
Regardless of whether you own residential or commercial property, foreclosure may not be your best option. For foreclosure help and information on alternatives,Contact Bankruptcy help attorneys at The Castiglia-Rubinstein Law Firm today to discuss your options. Schedule an appointment and learn how we can help you. |
Bankruptcy
