Recently, during my daily trek to work from Queen Creek to Mesa, I heard a radio spot announcing that the housing market is on the verge of the second dip of a double dip recession. I cringed at the thought of what this would mean for my home and wondered if I would be able to sell it should my family ever outgrow it. I arrived at work, only to find half a dozen emails from folks looking for legal advice – half of which were concerning the very subject I had been considering on my drive to work.
The first individual was current on his house. He made enough money to pay his regular monthly bills, but not his credit cards. He wanted to file bankruptcy, but was worried he might lose his house. He ended up qualifying for a chapter 7. He continued paying his monthly mortgage, kept the house and received relief from all of his credit card debts.
The second was a single mom with two jobs, two mortgages, two kids and too much debt. She wanted to keep the house but was two months behind on the first and had not paid the second in nearly a year. She felt like she had to keep the house because she did not want to uproot either of her kids from their friends and school. She filed a chapter 13 bankruptcy. She began making her regular monthly payments on the mortgage and was able to spread out the repayment of the arrears over the next five years. She was also able to strip the second mortgage off of the house because the home’s value was less than what she owed on the first mortgage. She is currently in the middle of her plan and is on her way to greater financial stability.
The last was in the middle of the loan modification process and panicking because she recently received a foreclosure notice and wanted to know if bankruptcy could help her. She was not willing to give up on the modification process and wanted to make sure she exhausted every avenue to keep her home. She decided to file a chapter 13 to postpone the foreclosure date with the hopes of giving the bank more time to process her loan modification. She was fortunate, and her modification application was eventually approved.
Bankruptcy is not a magic wand that fixes everything, but it can be an effective tool to help save your house.
If you have questions on whether bankruptcy is right for you call me, Benjamin Skinner, experienced Arizona bankruptcy attorney, for a free consultation at (480) 648-8975.