Bad situations such as a sudden job loss or any unexpected medical expenses may result in you going under a huge amount of debt. For a person who owns a home, the major concern is what will happen to their home. Being behind mortgage payments can send the creditor towards foreclosing on your property. One of the best ways out of this situation is to file for bankruptcy, suggest Los Angeles based bankruptcy law firm Recovery Law Group lawyers. However, once you decide that bankruptcy is the answer to your problems, the big question is whether to file for bankruptcy before foreclosure or after the foreclosure action has been initiated by the creditor?
Another important factor to consider is which chapter of bankruptcy you should file under; Chapter 7 or Chapter 13? A skilled attorney can help decide this by weighing the pros and cons of both the chapters regarding your unique situation. Ideally, you should file for bankruptcy prior to foreclosure proceedings. This is because, if the housing market has been on the downside your home will fetch you less money when sold than you owe in the mortgage. Thus, even after losing your home, your creditor might come after you for the deficiency, depending on the laws of your state. Sometimes, the debt might be canceled; however, you might still end up owing taxes.
Filing for bankruptcy opens a lot of avenues. State and federal exemptions might protect your equity in the property so that you might not have to surrender your home. A bankruptcy attorney will be able to guide you better on the best course of action to protect your home from foreclosure when you file for bankruptcy. In case you need a consultation with qualified and experienced bankruptcy lawyers Los Angeles, you can call 888-297-6023.