Foreclosure combined with Bankruptcy

Sacramento Bankruptcy Attorney serving Roseville can help you evaluate your home's true value and decide whether a Chapter 7 or Chapter 13 bankruptcy helps you to keep it or let go knowledgeably If you got a "good deal" on your home, bought it for a good price, or low interest rate, or because of a valuable location during a time of making profits through buying and selling real estate, your home (or primary residence) may have value to you only as your "highest valued asset." So, if you think this way, bankruptcy may only represent a tool, a means, to protect an investment that has lost value. That's okay. It's a valid way of thinking. But to some people, a home is not just about dollars and cents, a business deal gone bad in the economy. It's not an easy decision to just walk away from a house which is "under water" as far as financial value. To many individuals and families, a home is more than money investments – it is time spent, memories created, a legacy we might want to pass on to another generation. That said, there are some practical considerations that may help anyone who has to deal with loss of a home to foreclosure. Is there anything bankruptcy can do to help save your home from foreclosure? The answer is mixed: Here are six things, three for letting go, three for keeping your house, through a bankruptcy filing. Let go if: 1. The first consideration is simply: do you still have the income to make the ordinary mortgage payments? If your main reason for considering bankruptcy is due to the long-term loss of a job and main source of income, then saving your home with bankruptcy may not be practical. 2. If your home recently lost significant market value, to the point where your outstanding mortgage exceeds the home's market value, then trying to save the house during bankruptcy might not make financial sense, regardless of your available income. 3. If the amount you are arrears on the mortgage is larger than you can afford to take care of during a five- year Chapter 13 repayment plan, then it still may not make sense to try to save the house. Keep fighting to keep the house if: 4. If you still can make house payments, and can afford to repay the arrearage during a 5 year plan, then Chapter 13 is a good way to save your home from foreclosure. 5. Bankruptcy may be the only way to save your home from the lender, since many lenders routinely refuse to accept new payments once foreclosure notice has been sent out. A properly filed Chapter 13 bankruptcy can stop a foreclosure sale, even if filed up to or on the scheduled date of the sale. 6. Even though a Chapter 7 bankruptcy doesn't directly save a home like a Chapter 13 reorganization would, if your main financial problem is a mountain of unsecured credit card debt, then a Chapter 7 bankruptcy may help you find a way to make mortgage payments and re-affirm the mortgage debt in order to save the home. Before assuming you need to save your home from creditors no matter what, take a moment to think about your assets, income, and the nature of your other debts. Then calculate whether saving the house makes financial sense or not. Some people bought their home as an investment and now that investment has gone south. But even if the numbers don't add up, and, to you, there's more to your home than just a house, then my advice is don't give up exploring your options. Education is just the first step. You'll be surprised at the innovations people have discovered and used to live their lives the way they have chosen. The advice of an experienced bankruptcy attorney can help you determine your options and action plans in light of your income, assets, and the nature of your debts. This analysis will enable you to best use the provisions under a Chapter 7 or Chapter 13 bankruptcy to achieve your financial goals. Please contact our bankruptcy law firm serving Roseville and Sacramento at 916-313-9069 or via email at

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