If you run into severe financial problems and begin receiving warning letters or notices about foreclosure, bankruptcy may help you keep your home. As described by Bankrate.com, after filing a bankruptcy petition, creditors may no longer contact you because of the automatic stay.
When the court issues the injunction, your mortgage servicer, for example, must stop threatening to auction your home. The bankruptcy procedure’s automatic stay may give you some additional time to catch up on your past-due mortgage payments or work out a new payment schedule.
Could a Chapter 7 bankruptcy allow me to keep my home?
The U.S. Bankruptcy Code provides individuals with two different petitions that may save their properties. If you experienced a severe change in your finances and own your primary residence, you may file for Chapter 7 bankruptcy. Under the South Carolina Code of Laws, you could have an option to protect your home from creditors by claiming the Palmetto State’s homestead exemption.
As noted on SCStatehouse.gov, petitioners may keep their primary residences when the equity value does not exceed the state’s allotted homestead exemption limit. You may, however, need to provide the court documents showing that the value of your home falls within the homestead allowance.
Could it help me keep my home if I have a steady income?
As described by Credit Karma, a Chapter 13 bankruptcy requires petitioners to show they receive regular income. With a Chapter 13 petition, however, you must submit a payment plan to repay your creditors, which a court trustee oversees. By entering into a three-to-five-year payment arrangement, you may keep your property.
Bankruptcy provides protection from creditors, including mortgage lenders, through the automatic stay. You may also stop receiving communications from collection agents for other unpaid debts. After reviewing your options, you could have a way to remain in your home.