When you’re experiencing financial hardship, life becomes full of uncertainties. Looking at your monthly budget can be incredibly stressful.
- Where is the grocery money coming from this month?
- What funds are available for the utility bill?
- How will you cover the mortgage payment?
The last question—the mortgage payment—can be the biggest concern. It may be the largest bill to cover every month, so it is often a primary worry. The idea of becoming homeless or moving in with a family member when you have a family of your own? It is a fear-inducing prospect!
If you can’t cover your mortgage and the bank notifies you of foreclosure proceedings, you may be able to save your home by filing bankruptcy.
How can bankruptcy help?
Filing personal bankruptcy, through Chapter 7 or Chapter 13, can create an “automatic stay” on foreclosure proceedings. If your property is exempt, foreclosure proceedings cease soon as you file the petition—see Chapter 7 details below.
In Chapter 7, you need to make sure that your property is exempt before you apply, or you could unknowingly put your home at greater risk. You can check if your home is exempt with the help of a qualified bankruptcy attorney. In Ohio, the homestead exemption is $145,425. This means that equity in your home cannot exceed this number or it can be sold to pay off your debts. However, married couples who jointly own property can double this exemption amount.
In Chapter 13, you are given a reasonable amount of time—which is determined by the bankruptcy court—to get current on your mortgage payments. But keep in mind that if the foreclosure finalizes before you file for bankruptcy, you will lose the home. That’s why applying for bankruptcy earlier rather than later is advisable.
Saving your home is possible
Right now, it may seem like your world is crashing down. But there are options, like filing bankruptcy, which can help you maintain your lifestyle as you get back on track financially.