Desperate times call for desperate measures. Who would have thought that bankruptcy could have benefits and actually save homes? Then again, sometimes things may just sound too good to be true. Bankruptcy is indeed a desperate solution or is it a viable one? Only a Houston foreclosure defense lawyer could clarify that for you.
Texas is among the states which allow non-judicial foreclosures. Essentially, this means that foreclosure proceedings will not be supervised by the court unless the lender files for a lawsuit against you or the other way around. Foreclosure is a delicate situation triggered by accumulated debt. A Houston foreclosure defense lawyer would probably indicate bankruptcy as a solution to halt the foreclosure process until you could properly reorganize your finances and get back on track.
It seems a simple solution which can buy you some time, even years, in some cases. When you are facing foreclosure, you are probably facing all kinds of other types of debt as well. Therefore, the question remains, what are the actual consequences of selecting bankruptcy as foreclosure defense strategy? Here are the pros and cons of bankruptcy that a Houston foreclosure defense lawyer must inform you about.
The Advantages of Bankruptcy
Filing for bankruptcy triggers the automatic stay which practically stalls any proceedings. Here are some of the benefits of this strategy:
Stop foreclosure process – Lenders need to stop foreclosure proceedings once youve filed for bankruptcy. As a result, you can put mortgage arrearages into a debt repayment plan which can be extended to as much as five years.
Continue payments on secured debts – A discharge of unsecured debts such as a credit card will allow you to continue your payments on secured debts such as mortgage.
Stop vehicle repossession – In general, foreclosure on your home doesnt come alone and it triggers situations such as vehicle repossession which can be stopped through bankruptcy filing.
Free from collectors – Collectors must stop any debt collection activity. This will take away the stress of permanent phone calls and visits as a Houston foreclosure defense lawyer will inform you.
The Disadvantages of Bankruptcy
Using bankruptcy to halt the foreclosure procedure comes with several other advantages but it also comes with a number of disadvantages that the Houston foreclosure defense lawyer must inform you about even if they may not seem directly related to the foreclosure defense strategy:
Ruin your credit – You will ruin your credit for the next 7 years at least and that is the greatest disadvantage of all.
Will not wipe out all debt – There are certain categories of debt that will not be discharged if you file for bankruptcy such as income taxes older than 3 years, past due child support or alimony, student loans, or debts incurrent by fraudulent means such as writing a bad check.
No mortgage or credit cards – Once you file for bankruptcy to avoid foreclosure, you will not be able to apply for a mortgage or get a credit card for quite some time.
Embarrassment – Although that has nothing to do with a financial disadvantage, embarrassment can be as bad as having creditors knocking on your door.
The role of a Houston foreclosure defense lawyer is to inform you of all the details related to filing for bankruptcy. Yes, it may be the best and sometimes the only defense tactics you may be able to use but it does come with a baggage and it is only fair that you know what to expect.