Columbus Foreclosure Bankruptcy Lawyer
Practical Advice and Effective Solutions From Experienced Ohio Foreclosure Defense Lawyers
Filing for bankruptcy is one way to stop a foreclosure, at least temporarily. Many law firms recommend a bankruptcy filing as a way to stop foreclosure. As you might expect, many of those law firms are staffed by bankruptcy lawyers that promote bankruptcy as a solution to all sorts of financial troubles, despite some of the negative consequences that naturally flow from filing for bankruptcy. We aren’t bankruptcy lawyers. We are foreclosure defense and consumer law attorneys. We won’t try to push you into bankruptcy prematurely; in fact, we’ll do what we can to help you avoid bankruptcy by dealing successfully with your foreclosure in other ways first where possible. Before you decide on bankruptcy to solve your mortgage default, call our experienced Columbus foreclosure bankruptcy lawyers for a free consultation to consider all your options.
Can Bankruptcy Help Me Save My Home?
Bankruptcy can be a way to keep your home from foreclosure, and our foreclosure defense lawyers are happy to let you know when we think bankruptcy might be a good option for you, especially if you don’t have strong defenses to a foreclosure or other viable options such as a mortgage loan modification. We feel it’s important for you to have all the facts in front of you, however, and not just talk to a bankruptcy lawyer who is more inclined to push bankruptcy as your first option rather than a last resort.
The most popular form of consumer bankruptcy is Chapter 7 because it allows consumers to get a complete discharge of all their unsecured debt. Debts like credit cards, medical bills, and personal loans can be completely wiped away, giving debtors a fresh start. Chapter 7 is known as “liquidation” because the bankruptcy trustee can first sell off the debtor’s property to pay creditors and only grant a discharge of the debt left over. However, Ohio bankruptcy law exempts numerous pieces of property from this liquidation, so that many debtors can get a discharge without having to sell any property. By getting rid of unsecured debt in a Chapter 7 discharge, you can free up your disposable income to better afford your remaining obligations such as your mortgage payment.
Simply put, Chapter 7 does not discharge secured debts such as a home loan which is secured by a home mortgage. Instead, the bankruptcy trustee might look at the home as an asset to sell and pay off creditors. Although houses are not exempt from liquidation, the Ohio bankruptcy exemptions do allow you to exempt a certain amount of equity you have built up in the home. Depending on the amount of equity you have and the value of the home, it might not be worthwhile for the bankruptcy trustee to take it and sell it. There is the possibility, however, that you could lose your home in a Chapter 7 liquidation.
The other type of consumer bankruptcy is Chapter 13. Many consumers don’t qualify for Chapter 7 and have to rely on Chapter 13 for relief. Instead of a complete discharge of debt, Chapter 13 requires creating a payment plan to pay off debts over a three or five-year period, after which certain covered, unsecured debts will be discharged. The debtor’s creditors have a say in creating this plan, but they are required to comply with a plan once approved by the bankruptcy court.
Part of the Chapter 13 debt adjustment can involve stripping a second mortgage off of a home or cramming down a first mortgage to a more affordable debt-to-income ratio, especially if the home is “underwater” or “upside down,” owing more on the mortgage than the house is worth on the market. This is probably the most attractive feature of a Chapter 13 bankruptcy for homeowners with mortgage issues, including a pending foreclosure.
Is Bankruptcy a Good Way to Stop Foreclosure?
Bankruptcy attorneys also point to something known as the “automatic stay,” which puts an immediate halt on debt collection activities once you file for bankruptcy, including foreclosure actions. The automatic stay is only in place while the bankruptcy proceeding is underway, however, so at most it only provides you with a few months of relief. Also, creditors can apply to the court for relief from the stay and resume their collection activities even while the bankruptcy proceeding is ongoing.
A Chapter 13 bankruptcy stays on your credit report for seven years, and a Chapter 7 bankruptcy stays on your credit report for ten years. It cannot be removed early. During this time, you will find it more difficult to obtain credit at an affordable rate, obtain rental housing, or get certain jobs. Bankruptcy might be the right tool for you to fight foreclosure, but we view it more as a last resort after you have explored other options first, including whether you can fight a wrongful foreclosure in court or get a mortgage loan modification to make your monthly payments affordable. These are all things we can help you with, so call us today if you are facing foreclosure to find out how we can help.
Contact Kohl & Cook Today
If you are having trouble making your mortgage payments, if you are in default, or if you have received a notice of foreclosure, get advice and help right away from a team of knowledgeable attorneys dedicated to helping you find the best solution that meets your needs. Call our experienced Ohio foreclosure defense lawyers today for a free consultation and immediate assistance.