Usually the biggest detriment of bankruptcy is its negative impact on your credit score. However, this may not be an issue for many people because they already have bad credit or they soon will because they lack the ability to stay current on their debts. If a person has suffered, or will soon suffer from, a home foreclosure, a vehicle repossession, or extended credit card delinquencies or write-offs, a bankruptcy will probably not make his credit any worse. Additionally, having a poor credit score doesn't mean you can’t get credit. It just means that some loans will be tougher to get and you may have to pay higher interest rates on large purchases like furniture, cars and homes.
There comes a time when bankruptcy is unavoidable. You may need to file to save your home or your bills are consistently higher than your income. Whatever the reason, filing bankruptcy can be a new beginning. You credit score may be hurt for a time, but if you use that time properly, you can start on the road to a new financial future and a better credit score.
To see if filing bankruptcy is for you, call a bankruptcy attorney. Most provide an free initial consultation.
For most people the answer is YES! Many people are faced with the specter of losing their homes due to foreclosure. The reasons are varied. Some people become delinquent on their mortgages because of a job change or a sudden illness or medical condition. Other people get behind because they use the mortgage payment money for other purposes such as helping out a family member might also be having financial problems or replacing the auto transmission that just went out. Most people expect to be able to bounce back quickly thinking they can "catch-up" next month. Unfortunately that often never happens. Instead they end up getting further and further behind. Before they know it they are receiving certified letters from attorneys telling them there home is about to be foreclosed on.
In Texas, the foreclosure process is easy for the mortgage companies. They don’t even need to get a court order to do so. If you become delinquent on your mortgage loan all they have to do is 1) accelerate your mortgage loan and 2) ask a trustee to auction off your property to the highest bidder in front of the county courthouse. The trustee is someone that you authorized, when you signed the loan documents, to sell you property to satisfy the loan in the event you become delinquent. Before the mortgage company can accelerate your loan, they must send you a motive of default by certified mail. If you fail to cure the default within 20 days, the mortgage company is free to accelerate your loan. This means that the entire loan balance is immediately due and payable. After the loan is accelerated the mortgage company can request the trustee to conduct a foreclosure sale of your home on the first Tuesday of any month. The trustee is only required to give you 21 days written notice of the date, time and place of the sale. This notice must also be send by certified mail. The hazard for many people is that the trustee is only required to mail you the notice. There is no requirement that you actually receive it! So if you fail to pick up your certified mail when the mail carrier leaves you that little pink notice slip, you may not even be aware that your property is about to be sold until it's too late. If you're behind on your mortgage, make sure you pick up your certified mail.
How can bankruptcy help? Once the foreclosure process is started it's often difficult to stop unless you can come up with the money to bring the loan current, plus pay for the mortgage companies attorney's fees. This may not be a realistic option for someone who is already a few months in arrears. The only option may be bankruptcy, specifically a proceeding under Chapter 13 of the Bankruptcy Code. Chapter 13 is a bankruptcy proceeding, which allows people to consolidate their debts, and get their monthly payments reduced to a more manageable level. But is can also be used to stop a foreclosure and propose a plan to cure the delinquent mortgage payments. Once the Chapter 13 is filed, the foreclosure is automatically stayed or stopped. You can then propose a plan to bring your mortgage loan current over a 5-year period. Once the bankruptcy court approves your repayment plan the mortgage company is prohibited from trying to auction off your home. Of course Chapter 13 bankruptcy may not work for everyone. You must have regular income and the ability to remain current on your future monthly installment payments. However, thousands of people have used Chapter 13 bankruptcy proceedings to save their home from foreclosure. If you need help saving your home from foreclosure, call a Board Certified Bankruptcy Attorney.