Benefits of Bankruptcy

Considering that the housing market collapse of a few years ago, and many people are in desperate need to sell their houses because they cannot afford mortgage payments, most of them are facing foreclosure. Now after the crisis hit, the jobless rate is around 10 percent and still there is no hope that will drop very fast.

Fore those that are it this situation, here are provisions about bankruptcy :

Foreclosure Process: if redemption on the mortgage is not made, the property will be sold to the highest bidder at auction. If the sale at auction does not satisfy the outstanding mortgage, the lender has the option to seek a deficiency judgment against all parties who are liable for the mortgage debt in order to make up the gap between sheriff’s sale price and the total mortgage debt.If the lender waives deficiency and forgoes the right to seek a deficiency judgment against the debtor(s), the redemption period is shortened to six months. From the debtor’s perspective, the debtor agrees to shorten the redemption period in exchange for the lender forgoing the right to seek a deficiency judgment if the sheriff’s sale does not yield a sale price that satisfies the outstanding mortgage debt.

Benefits of Bankruptcy: Chapter 13 bankruptcy, often referred to as “wage earners’” bankruptcy, offers those debtors that have a regular source of income a way to repay their debt. Under Chapter 13 bankruptcy, debt is consolidated and a regular monthly payment is established so the debtor is able to repay most of the debt over a period of three to five years. Any debt that is covered by the Chapter 13 bankruptcy that is not paid during the repayment plan is discharged at the end of the three to five year period.

One of the biggest benefits that Chapter 13 bankruptcy offers debtors is the ability to stay in their homes. If a debtor is facing foreclosure or is involved in foreclosure proceedings when Chapter 13 bankruptcy is filed, the foreclosure is stayed. The mortgage debt is then consolidated into the monthly payments, giving the debtor three to five years to catch up on missed mortgage payments.

Along with stopping foreclosure, Chapter 13 bankruptcy potentially offers debtors other benefits, including:
- Protecting loan co-signers
- Putting a stop to creditor harassment
- Rescheduling secured debts over the duration of Chapter 13′s repayment period, which may lower monthly payments
- Consolidating loan payments into one monthly payment

Not everyone will qualify for Chapter 13 bankruptcy. However, having a regular source of income is the biggest obstacle for most who would want to file for Chapter 13 bankruptcy. Speak with an attorney who can help you through the bankruptcy process and offer other options for which you may qualify, including Chapter 7 bankruptcy.

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Posted by N.Desiree on Aug 26 2010. Filed under Business, Featured News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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