But…”I Don’t Want to Lose My House”
First, in bankruptcy you can keep your house. The rule is very simple: If you’re current on your mortgage – there is no problem. If your behind in your payments or in foreclosure there is still help available.
In a Chapter 13 bankruptcy we can help you save your house if your mortgage is in default. However, you have to be able to afford to pay the mortgage along with a portion of the arrearage. If you can you should be ok.
NOTE: This should be discussed with us as part of your consultation. We will spend a lot of time analyzing your financial situation, and if you can afford it and we can propose a feasible Chapter 13 plan that the bankruptcy court approves, a house that is about to be foreclosed upon (even if days away from the Trustee’s Sale) can be “saved.”
If you in this situation (foreclosure proceeding have begun – either your received a Notice of Default or a Notice of Trustee Sale) contact us as soon as possible. The more time we have the easier it is to provide help.
The subtext of the question “can I keep my house if I file bankruptcy” is not can you “keep” it, but it’s another question entirely.
The real issue is can you really afford to live (own) in the house?
In my practice this is the proverbial elephant in the room. I can usually tell within a few minutes whether my clients can afford their mortgage or whether they are just fooling themselves.
This is one of the most often cited reasons for running up credit card debt or taking loans against 401k money prior to consulting with me. If you are spending more than 40% to 50% of your net pay (after taxes) on housing expenses: mortgage payments, taxes and insurance you are headed towards financial distress.
Another log on the wildfire mortgage debacle is the very strongly held belief of homeownership (THE AMERICAN DREAM). Most people want to “own” their house. This is taught to us from a very young age. The value of homeownership encompasses almost every aspect of our lives from tax benefits, most often the biggest investment you will ever make, importance of raising your kids in a safe neighborhood with a great school district all the way down to pride of ownership.
This dream has turned into a nightmare.
Very recently, a lot of people, and I mean lots of people bought houses without the proper financial education and end up with crazy mortgages that they could never really afford to pay. They had initial teaser rates that allowed families to “make” their monthly payment, but once they adjusted upwards they could no longer afford to make these payments and the downward spiral started. That combined with a slowing economy and job loss accelerated the problem.
If you find yourself spending upwards of 50 to 60% of your family net take home pay (after taxes) on mortgage, taxes and insurance you are in trouble and are probably living a financial lie by using credit cards to supplement your income by charging necessities and other living expenses. This is a terrible place to be. In interviewing hundreds of individuals and families, once this issue is confronted a lot of their current financial suffering begins to resolve itself. Call me and I will personally walk you through the housing affordability analysis and than you can decide if your current house (and mortgage) is a “dream” or a “nightmare.”
Disclaimer
Fresno-Bankruptcy-Lawfirm.com is owned by the Law Offices of Jeffery D. Rowe. We are a debt relief agency. We help people file for bankruptcy relief under the Federal Bankruptcy Code (Title 11 of the United States Code). If you would like to discuss your situation in further detail, please call our offices at: (559) 228-1500 to schedule a consultation.
Tags: chapter 13, housing affordability, mortgage, trustee's sale