Don’t let the mortgage company foreclose on your home. Consumers lose all the equity in a home when this occurs. Rather, consider filing Bankruptcy in Fort Worth. In many instances, the mortgage arrears can be paid through the bankruptcy court. Arrears on vehicle payments can also be included in a bankruptcy.
Benefits of Bankruptcy
There are many benefits of bankruptcy including making a fresh financial start. Initially, consumers need to consult with a lawyer about filing Bankruptcy in Fort Worth. The lawyer advises clients to make a list of debts and assets. In addition, they need the addresses for each creditor. The list should include medical bills, credit cards, mortgages and income taxes. The debt to asset ratio helps the lawyer determine which bankruptcy chapter to file.
Anyone without a steady source of income should consider Chapter 7. It’s a liquidation bankruptcy and some of the client’s property is sold to repay debt. However, the debtor gets to keep a certain amount of property including some of their home equity. Further, filers need to pass the “means test.” The results show the court that the filer is not able to make debt payments. These bankruptcies are usually discharged within a few months.
Chapter 13 is often called “the working man’s bankruptcy.” That’s because debtors must have a regular source of income. Chapter 13 filers make a monthly payment to the bankruptcy court. In turn, the bankruptcy trustee divides the payment between creditors. The downside is often the size of the monthly payment. Filers have to make current payments in addition to the bankruptcy payment. As a result, they do not have a lot of disposable income The bankruptcy is spread over three to five years so that’s a long time to live frugally.
There are many benefits of having a lawyer. The lawyer negotiates with creditors and the court in many ways. For instance, it’s possible for the lawyer to get a cram-down on high-interest loans. This means the creditor pays the fair market value of property minus some of the interest. Further, the lawyer allows clients to break the legal fees down into several payments.
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