Walking away from a home in a bankruptcy
On behalf of Bankruptcy Law Firm of Clare Casas on Thursday, April 23, 2015.
Individuals in Florida who make above a certain amount of money may declare Chapter 13 bankruptcy. In this type of bankruptcy, an individual pays back debts over a period of three to five years. This may include a mortgage payment. However, that individual may decide that they are unable to continue making the mortgage payments.
It is possible for an individual in a Chapter 13 bankruptcy to walk away from a home if they feel that they can no longer afford it. The individual might first look into whether they qualify for a Chapter 7 bankruptcy. In such a case, they can change their bankruptcy from a Chapter 13 to a Chapter 7.
However, individuals who cannot make the change can still simply stop paying the mortgage. After a period of non-payment, the property will be removed from bankruptcy protection. Although it will eventually be foreclosed upon, this is a long process, and individuals may remain in the house until the foreclosure is complete.
A bankruptcy attorney may be able to review an individual's finances and determine whether it is possible to change from a Chapter 13 to a Chapter 7 bankruptcy. An individual who is considering filing for bankruptcy may want to consult an attorney as well. The attorney may be able to make recommendations as to whether bankruptcy might be the right solution and what type of bankruptcy the individual should file for.
Attorneys may also be able to clear up misconceptions about bankruptcy. For example, many people have to file for bankruptcy due to job loss, illness or other unexpected events rather than due to carelessness. During a bankruptcy, people may sometimes retain possession of assets including a home and a vehicle and can rebuild credit following the bankruptcy.