- Pursuing a mortgage modification
- Negotiating an agreement with your lender
- Selling your home at market value (deed in lieu of foreclosure)
- Negotiating a short sale
- Refinancing your home
- Filing for bankruptcy protection
It is not necessary to file for Bankruptcy.
If you had a slip and fall accident on someone else’s property, they may be held responsible for the injury if negligence was involved. For example, if the owner of that property knew of a missing railing in a stairwell but failed to have it replaced in a timely fashion, or post a warning sign, and you fell while walking down that staircase, the property owner may be held accountable.
Liability may be defined as legal responsibility, costs or damages. If someone else caused your injuries, intentionally or unintentionally, they may be held liable for your medical care, lost earnings, or other damages associated with your injuries. The at-fault party may be held responsible to financially compensate you for these losses.
Personal injury may be defined as physical or psychological injury caused by another. An individual or company may act negligently or intentionally or may be held strictly liable for causing injury to a person. Personal injury lawsuits are handled in civil court and enforced by financial compensation, rather than criminal court.
Negligence may be defined by a failure to exercise the care toward others which a reasonable or prudent person would do in the circumstances, or taking action which such a reasonable person would not. Negligence is accidental, but can also result from crime constituting negligence, such as reckless driving. It can result in all sorts of accidents causing physical or property damage, and can also include business errors or miscalculations.
Stop a mortgage foreclosure: If you file a Chapter 13 bankruptcy, the lender will be forced to stop foreclosure and accept a plan where you make up the missed payments over time, while keeping current on your regular monthly payments. You will have to be able to demonstrate that you will have enough income int eh future to support the repayment plan.
Let you keep nonexempt property. You don’t have to give up any property, because you use your income to fund your repayment plan.
Sometimes you can use Chapter 13 to reduce a debt to the replacement value of the property securing it, then pay off the debt through your repayment plan, for example when your car is only worth $10,000.00 but you owe $15,000.00. This is called a cram down. Another powerful tool is to strip off a second mortgage. For instance, if you owe $250,000 on your home and the home is only worth $150,000 and you have a second mortgage, you can propose a plan that removes the second mortgage if it is wholey unsecured, or in other words, if the second mortgage is “underwater”.
Secured debts are tied to an asset that is considered collateral for the debt. Lenders place a lien on the asset, giving them the right to take the asset if you fall behind on your payments. If the lender has to take your asset because you’ve become delinquent, the asset will be sold. If hte selling price for the asset doesn’t completely cover the debt, the lender can pursue you for the difference. (The difference is then considered unsecured debt, since there is no more collateral left to collect.)
A mortgage and and auto loan are both examples of secured debt. If you become delinquent on these loan payments, the lender can foreclose or repossess the property.
Unsecured debts are debts that the lender has no right to collateral for that debt. If you fall behind on your payments, they don’t have the right to take any of your assets.
A lender may take other actions to get you to pay, such as a debt collector to coax you into paying the debt, or the lender may sue you and ask the court to garnish your wages, take an asset, or put a lien on your other assets until you’ve paid off the debt. They will also report the delinquent status to the credit bureaus, and it will be reflected on your credit report.
In a Chapter 13 bankruptcy you can use your income to pay some or all of what you owe to creditors over time, usually three to five years, depending on the size of your income and debts. In return for the Chapter 13 bankruptcy repayment plan, you may keep your property. The repayment plan describes in detail how and how much you will pay for each of your debts. The court must approve your repayment plan and determine that you have enough income to meet your payment obligations under the plan.
You have a legal right to file for Chapter 7 bankruptcy relief if you reside in, do business in, or have property in the United States. Unless you have intentionally dismissed a prior bankruptcy case within the last 180 days, you can qualify under the means test. The means test assesses your current monthly income, multiplied by twelve. If that doesn’t exceed the median annual income, based on your family size, you qualify. You also must show that you cannot pay a minimum of $110 per month for 60 months to your unsecured creditors from your disposable monthly income. Disposable monthly income is your current monthly income less current monthly expenses. If you can pay this minimum, your Chapter 7 case will be dismissed or converted to a Chapter 13 case, with your consent.
Chapter 7 bankruptcy is a proceeding under federal law in which you seek relief from creditors, turning over your nonexempt property to a trustee, who converts that property into cash to pay your creditors. In exchange, you receive a Chapter 7 discharge and the court orders a release from all of your dischargeable debts. This court order also prevents your creditors form attempting to collect the debt. Some types of debts, like child support, alimony, and tax debt not assessed for more than three years, are not dischargeable under Chapter 7 bankruptcy.