Will Bankruptcy be Able to Protect Your Home From Foreclosure?
The short answer is that saving a home from foreclosure depends on a number of factors. As the debtor (the person filing bankruptcy) is generally substantially behind in house payments, Chapter 7 will not be of any help as discussed below. Chapter 13 is probably the best bet for the debtor to save the home. Whether the home can be saved depends on a number of factors, such as the following:
- Is the home worth saving?
- Is the home underwater or does it have equity?
- Is a loan modification necessary to save the home?
- Is there a second mortgage on the home that can be eliminated?
- How secure is the debtor's income?
- Can the debtor pay back the past-due mortgage payments over 60 months if all other non-essential debts are removed?