If you’re struggling with your mortgage payments, you may find yourself considering filing bankruptcy or foreclosing on your home. While it can be important to act quickly, we encourage you to discuss all of your options with an experienced Tacoma attorney. At Ark Law Group, we’re here to inform you of your options and help you make the best choice for your circumstances.
Contact us today to get immediate assistance.
Chapter 7 bankruptcy is a very fast process and can be used to stave off foreclosure by reducing your non-home debt to free up assets to go towards making good on your past and present mortgage payments. For example, if you have a loan for your vehicle, the bank may take the car. You will be without a vehicle and the loan payments that went along with it and will be able to refocus the income that you have on paying your mortgage.
Chapter 13 is a more long-term form of bankruptcy that lasts for three to five years and requires you to follow a payment plan to repay the debt owed to creditors. You will have the life of your bankruptcy plan to pay back the overdue mortgage payments. This type of bankruptcy is better for your credit score, since you will be repaying your debts, and also typically avoids paying extreme interest rates or late penalties.
Sometimes, it is not worth filing for bankruptcy when your home is worth less than what you owe on your mortgage. In fact, 15.4 percent of homeowners, or roughly eight million, are underwater on their mortgage, according to Forbes. For many homeowners, letting the home foreclose and staying in it throughout that multi-month process and continuing to default on their mortgage payments is the best option.
However, while foreclosure enables you to move on with your life debt-free, it can drastically damage your credit and make it difficult to get a loan in the future. Before moving forward with foreclosure, we advise that you should first consult with an experienced attorney. There may be another way out.
You may have better options than foreclosing on your home. Our attorneys are here to provide strong yet compassionate assistance in what could be one of the most crucial junctions in your life.
Borrower misses first payment
Borrower receives Notice of Default (not public record in WA)
Borrower receives Notice of Trustee Sale (public record in WA)
Trustee Sale: Home is auctioned on the courthouse steps
Borrower must vacate the home
Bank begins the “trash out” and clean up process
Bank lists the home on the MLS
Bank sells home
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