What chapter should I file under if I am facing foreclosure?
If you determine that bankruptcy is the best path for you to save your home. The next step is to figure out which Chapter makes the most sense for your needs. Every homeowner’s circumstances are so unique. It really is a conversation that needs to be had with a qualified Florida bankruptcy lawyer.
As with most financial decisions, the bankruptcy path you choose is mainly dependent on your situation. As we mentioned earlier in this series, most homeowners find Chapter 13 to be a better option because it allows you to repay your mortgage arrearages as part of your court-approved repayment plan. In addition, Chapter 13 gives you the opportunity to eliminate second and third mortgages, which Chapter 7 does not. (We will discuss lien stripping in more detail in the next post.)
The Chapter 7 Income Threshold And The Challenges It Can Present
Attempting to save a home via Chapter 7 can present issues of its own. Qualifying for Chapter 7 bankruptcy requires that you pass a means test. You will need to meet a certain income threshold before you will be allowed to file under Chapter 7. Homeowners who make enough money to afford a mortgage often exceed that income threshold.
Your best bet is to talk to a lawyer who can review your financial situation and advise you on your bankruptcy options. Most bankruptcy firms offer a free initial consultation where you can get your questions answered so you can make an informed decision. If you are facing foreclosure, time is of the essence. Do not wait to seek a lawyer’s advice if you have already been notified of the bank’s intent to foreclose.