To distressed Arizona homeowners, the idea of saving your home by declaring bankruptcy seems too good to be true. But it’s not.
When you file for bankruptcy protection, foreclosure proceedings come to a halt, debt collectors are required to stop calling, and in many cases, debtors can reorganize their finances so that they can keep their homes.
Of course, there are exceptions. If you are losing your home because you have lost your job or your income has otherwise permanently decreased – due to divorce, disability, wage cuts or any other reason – bankruptcy cannot help you stay in a home you can no longer afford.
If you can keep making payments, it is important to consider what chapter of bankruptcy you should file. Chapter 7 bankruptcy allows you to wipe out all unsecured debt, which gives most homeowners enough breathing room to continue making mortgage payments. As long as the equity in your home is worth less than the Arizona exemption amount you will be allowed to keep your home.
In chapter 13 bankruptcy, the court will approve a plan for you to reorganize your finances and prioritize payments to creditors. Secured debt holders (like your mortgage holder) will be paid first, with any leftover funds going to unsecured debt holders.
The court may also choose to consider second mortgages, home equity loans, and home equity lines of credit as unsecured debt, and either discharge them (chapter 7) or put them at the bottom of the payment list (chapter 13); once the chapter 13 repayment plan is completed, any remaining unsecured debt is wiped clean.
At The Zolman Law, we believe that your life shouldn’t be defined by debt. We have helped hundreds of people just like you find the relief they deserve from harassing bill collectors, paycheck garnishment, foreclosures proceedings, and – most importantly – the constant worry about money and what to do about your debts.
We are a dedicated debt relief law firm. We help people from Phoenix, Mesa, Gilbert, Queen Creek, Chandler, Scottsdale, Apache Junction, Tempe and throughout Arizona file for bankruptcy or work through tough tax problems every day. We can help stop the debt cycle and give you relief from your overwhelming, burdensome, and crushing debt. Please don’t wait another moment. Call us right away – our attorneys will help get you the fresh start you deserve.