Can I File For Bankruptcy If I am Behind on Mortgage Payments or Car Loans?
Yes. You can file for bankruptcy if you are behind on your mortgage payments or car loans. It’s perfectly normal to feel overwhelmed and confused when you are struggling with auto loans or mortgage payments. It’s also normal to wonder whether filing for bankruptcy can help you resolve your financial situation.
Our Hershey, PA, bankruptcy attorney has worked with many people facing similar circumstances. If you’ve yet to meet with them to discuss your case, here’s how filing for bankruptcy can help with your insurmountable auto loans and mortgage payments.
Understanding How Filing for Bankruptcy Can Save Your Home and Car
One of the most important legal processes that can help people and businesses deal with overwhelming debt is bankruptcy. While it can’t get rid of all forms of debt, bankruptcy can offer welcome relief by discharging particular debts or reorganizing non-dischargeable debts. Depending on your specific financial state and the bankruptcy chapter you file, you can expect to keep your car or house.
How Bankruptcy Can Save Your Car
Car loans, like mortgage debts, are a form of secured debt. That means your lender can legally repossess your car if you can’t make your monthly payments. Fortunately, Chapter 13 bankruptcy can help you keep your car or restructure your auto loan and make it more manageable. On the other hand, if it’s not possible or practical to keep your car, filing for Chapter 7 will erase your remaining auto loan balance as long as you surrender your car to your lender.
How Bankruptcy Can Save Your Home
If you can’t seem to keep up with your mortgage payments and default on your loan, your lender will not hesitate to initiate foreclosure proceedings. To avoid losing your home, you can consider filing for Chapter 13 bankruptcy and catch up on the mortgage payments you owe your lender.
Filing for Chapter 13 will trigger the automatic stay, which will temporarily stop the foreclosure and give you sufficient time to plan and negotiate a reasonable repayment plan with your lender. Likewise, if you still earn a decent amount even if you’re behind on your mortgage, Chapter 13 may help with reorganizing your debt. On the other hand, if you don’t plan on keeping your home, filing for Chapter 7 will give you a clean slate and wipe out the unsecured debts that are making your financial situation impossible to fix.
You should know, however, that while bankruptcy can help you deal with car and mortgage loans, consider talking to a Hershey, PA bankruptcy lawyer first because it may not completely erase your debt. Keep in mind that bankruptcy is a privilege that helps people reorganize their finances and offers relief from mounting financial burdens.
Explore Your Options With Our Seasoned Hershey, PA, Bankruptcy Attorney Today
Bankruptcy can really make a difference in your financial situation, but it is not always the right solution for everyone. For more information about bankruptcy and other debt relief options, schedule your consultation with our Hershey, PA, bankruptcy lawyer at Audi Law PLLC by calling 717-707-5611 or reaching us online.