If you own a home and you are considering filing for bankruptcy, you are probably worried about losing your house. The law provides numerous exemptions which protect assets from being included in the bankruptcy estate. Additionally, it is possible that filing bankruptcy can actually positively impact your real estate holdings.
If you own a home that is not worth as much as you owe on your mortgage, or you have more than one mortgage on your house, you may be able to strip a lien. A Chapter 13 bankruptcy may allow you to prove that your “underwater” home does not have sufficient value to support a second or third mortgage. Thus, the inferior mortgages should be treated as unsecured debt, which effectively strips the mortgage lien from your home and you pay pennies on the dollar owed.
In some situations, a debtor may be able to negotiate with a mortgage lender to lower an interest rate or re-amortize a loan. Renegotiating your mortgage loan could lower your monthly payment and help you remain in your home.
If you own a home that is underwater and you want to remove your liability to pay for it, a bankruptcy debtor can surrender the property back to the creditor. The creditor must take the home in full satisfaction of the loan balance because any remaining deficiency is treated as an unsecured debt. Debtors in personal bankruptcy cases pay unsecured creditors very little, if anything at all, which could save you thousands of dollars.
For your bankruptcy, foreclosure, and debtor’s rights matters, contact DeLadurantey Law Office, LLC at (414) 377-0518. We serve the counties of Milwaukee, Waukesha, Kenosha, and Racine, including such areas as Milwaukee, Merton, Delafield City, Waukesha City, and Kenosha. Visit our web site and like us on Facebook.