Bankruptcy can feel like an incredible loss, especially if your home is involved. You may have tried everything you could to cut living expenses and simplify life, but there just isn’t enough money to keep up with the mortgage and other bills. While it may feel devastating to need to move out of your home, filing bankruptcy may also give you the opportunity to get out of a mortgage that you truly can’t afford. If you’re uncertain about how bankruptcy might affect you, just call me so I can help guide you.
You Have Time
Bankruptcy doesn’t always mean you’ll need to move out of your home, especially if you choose a Chapter 13 and stick to your repayment plan. However, if that’s not possible and you file a Chapter 7 bankruptcy, you might wonder how long you can stay in your home during the bankruptcy process. As soon as you file bankruptcy, the automatic stay begins, which means the mortgage company will not be able to contact you to try to collect your debt. If you were in the middle of a foreclosure, that stops as well, but the break is not forever. Your mortgage company will quickly file a “motion for relief from stay” and the court will lift the automatic stay. Throughout this process, you and I will be in communication so that you aren’t caught off guard and forced to make last minute decisions.
Make a Plan
As soon as foreclosure proceedings begin again, you’ll know exactly when you’ll need to move out. Depending on where you live and your mortgage company, you could have a few months or just a few weeks. By the time you get to this point, you will have had some time to make a plan for housing, and hopefully you’ve also put some money away for moving expenses. With your budget in mind, consider where you’d like to live and the features you absolutely need in your home. As you’re getting back on your feet, try to live as simply as possible, knowing this won’t be your permanent home. If you’re not in your ideal neighborhood or house, you can move later when your finances have stabilized. As you apply for rentals, remember that the bankruptcy and foreclosure on your credit report may be a challenge. You might want to write a short letter to potential landlords demonstrating that you do have the income to cover the rent. Be sure not to cut the timing too closely. Have your new place lined up with plenty of time to be completely out of your home by the foreclosure date.
Here to Help
While it is sad to have to leave a family home, the people you’re with and the memories you make are what truly matter. Filing bankruptcy gives you a new start, and you’ll get back on your feet and into a new home much sooner than you probably think. If you’re in debt over your head, call me to see if bankruptcy might be right for you.