If I declare bankruptcy, what happens to my house? For many San Diego homeowners facing financial hardship, this is one of the most pressing questions.
The answer depends on your specific situation, but generally, whether or not you can keep your home depends on the type of bankruptcy you file, the equity in your house, and your ability to continue making mortgage payments. In some cases, we can help you with your home and bankruptcy in San Diego, giving you time and legal protection to sort out your finances. In others, it may be an opportunity to walk away from an overwhelming mortgage without further legal consequences.
If you’re considering filing for bankruptcy, understanding your home and bankruptcy in San Diego will affect you is crucial. This article breaks down the key factors that determine what happens to your house during bankruptcy and how homeowners in San Diego can protect their assets and avoid foreclosure while navigating this difficult process.
Factors that Determine If You Can Keep Your Home
If you’re trying to bring some financial relief to your life, you’re most likely wondering what your options are when you are headed into bankruptcy proceedings. Let’s take a look at the factors that determine if you will be able to keep your home through it all:
There are two types of bankruptcies you can file: Chapter 7 and Chapter 13. There are many differences between filing a Chapter 7 or Chapter 13 bankruptcy, but the main difference has to do with the exemptions to which you are entitled. Chapter 7 bankruptcy is also known as a ‘straight bankruptcy,’ in which the bank liquidates all of your assets and wipes out your debts.
This can truly help those in financial distress start over. Only those with a reliable form of income are allowed to file for Chapter 13, so there are obviously going to be vast differences from those filing under Chapter 7.
Equity Factor
Whether you are filing Chapter 7 or Chapter 13, there are ways to keep your home. With Chapter 7,, the bank only looks at the equity of your home when deciding if your house is exempt under Chapter 7. What’s interesting is that many people filing for Chapter 7 have little or no equity in their home; some even have negative equity in their property, so they would be exempt and their home does not need to be sold. However, living in San Diego, we know that house prices and property values historically rise each year, so this may not necessarily be the case for your San Diego home.
If you are continuing to make payments throughout the bankruptcy process, then you will be able to keep your home. Making mortgage payments and the ability to make continued payments is key. However, if your current income does not allow you to make consistent monthly mortgage payments, the bank has the ability to foreclose on your home.
This is when a big decision needs to be made. Bankruptcy allows homeowners to walk away from their home and the payments that have been a huge financial burden with no additional consequences in most cases. And truly, it may be the best choice to walk away from your San Diego home without your hefty mortgage payments causing more stress and anxiety. Additionally, the cost of home repairs may be more than is reasonable.
Why Choose Trusted House Buyer?
If you’re about to enter the dreaded bankruptcy process, let Trusted House Buyer step in and buy your house today. We have the ability to buy your house as-is which means your house can be in any condition. You’ll be able to walk away from the headache of court proceedings with cash in your hand for your home. We are usually able to make a cash offer rather quickly and have the ability to close within ten days.
Imagine a life free of the financial burden of your mortgage. Working with Trusted House Buyer may be the simplest option for you and your family. We are a family run business in San Diego with a reputable track record of working closely with our clients to help them navigate rather sensitive situations. We understand that each home and its inhabitants come with a unique set of circumstances that we are willing to work through together.
If you’re interested in learning more about how Trusted House Buyer San Diego can help you sell your home so you can avoid the headache of the bankruptcy process, give us a call today at 619-786-0973. We look forward to working together! Wondering how soon you can sell your house after buying it – read more in our blog.