Chapter 7 versus Chapter 13 Bankruptcy and Foreclosure
Between 2006 and 2010, the number of bankruptcy filings in the United States increased by 158 percent. The number of foreclosed homes across the nation has also increased. According to the Mortgage Bankers Association, it is estimated that one out of every 200 homes will be foreclosed upon in the United States. For those who find themselves in this situation, that is more than simply a statistic. It is a painful, distressing prospect.
If you are struggling with your mortgage, Chapter 7 or Chapter 13 bankruptcy protection may offer you an opportunity to avoid foreclosure and regain control of your financial circumstances. For more information about how bankruptcy could prevent foreclosure, contact the experienced Maryland mortgage modification lawyers of Chaifetz & Coyle, P.C., at 443-546-4608.
Difference between Chapter 7 and Chapter 13 Bankruptcy
Choosing the right chapter for bankruptcy is crucial in avoiding foreclosure. Some of the most important differences between these two chapters include the following:
- Chapter 7 – homes are typically considered “exempt” property and therefore are unlikely to be subject to bankruptcy sale. This may be an attractive option if you have not yet received a foreclosure notice.
- Chapter 13 – filing for Chapter 13 bankruptcy allows a debtor to reorganize or restructure their debts so that their payments may more readily align with the realities of their financial circumstance. By renegotiating the terms of a mortgage, a debtor can prevent foreclosure and begin to make regular, manageable payments.
If you or someone you know is facing foreclosure, it is important to know that you have options. To discuss bankruptcy and other options for avoiding foreclosure, contact the Maryland mortgage modification lawyers of Chaifetz & Coyle, P.C., by calling 443-546-4608.