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Will I lose my house if I file bankruptcy?

November 7th, 2009 Wantland Posted in Bankruptcy, FAQ No Comments »

Will I lose my house if I file bankruptcy?

I constantly get asked, “If I file bankruptcy, will I lose my house?”. The short answer to this question is “not likely”.

It’s my experience that a mortgage company would rather get your mortgage payments rather than have yet another house on the auction block. If you’re able to make the payment, chances are the mortgage company will complain not a bit. There are some exceptions, the mortgage company expects you to maintain insurance, pay the Jefproperty taxes, and generally take care of the house (their collateral).

Your probably thinking, “well genius, if I could afford the house, I would not be in this kind of trouble!”. Maybe- I see a lot of people who don’t make the house payment because of credit cards or wage garnishments. Those are two things bankruptcy certainly can fix.

“Well, I’m going to lose my house anyway. I don’t need to file.”. Wrong again. If the bank sells the house at the courthouse door and it brings less than the loan amount, a deficiency is created. This is the amount left over that you still owe. That will be part of the claim against you and can be used to garnish your wages or checking account. Also, because of the automatic stay, the bankruptcy can stall the time it will take the mortgage company to move you out. You will be living rent free.

It’s pretty obvious in most cases, a bankruptcy will keep you in your home- even if for just a little longer.

Call us today to discuss your options. 502-957-0000.

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The attorneys of Wantland Law in Shepherdsville, Kentucky, advise and represent individuals and families in bankruptcy cases and debtor-creditor negotiations in Bullitt County, Nelson County, Spencer County, Hardin County, Okolona, Jefferson County, Louisville, and such communities as Mount Washington, Brooks, Lebanon Junction, Bardstown, Taylorsville, Elizabethtown, Radcliff and Fort Knox.

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