You may be holding off on filing bankruptcy because you fear losing your home. The fact is, bankruptcy is actually one of the best ways to protect your home. Personal bankruptcy creates a legal barrier between your home and your creditors.
According to Culture Map, Houston ranks fourth of the 50 largest metro areas in the United States for credit card debt. If you are one of the many Houstonians whose spending has outstripped your ability to pay, bankruptcy is one answer to your financial woes.
Chapter 7 bankruptcy is ideal for those with excess unsecured debt from credit cards and medical bills. This quick bankruptcy lasts about six months. The basics you need to survive are exempt from liquidation under bankruptcy. You will design a budget that includes your home, auto, utilities, food and even money for premium TV and entertainment.
Chapter 7 protects your house if you own your home and are current on the mortgage payments, as long as you do not have too much equity. Your attorney will ask you to file a homestead with the state, which protects up to $25,000 in equity.
Chapter 13 is a longer-term bankruptcy, lasting up to five years. It designs a repayment plan to help you catch up on your mortgage, auto loan, or pay delinquent taxes. Filing bankruptcy creates an automatic stay on any foreclosure proceedings. You remain protected from foreclosure by keeping repayments and new mortgage payments current.
Whichever option is right for you, bankruptcy can protect your family and home while giving you a fresh start.