When to give it back
When a person buys a house, they don’t think they won’t be able to afford it. However, many people find they are way in over their heads when they buy a new house. Many people finds this happens due to a divorce, death, or loss of income. There are some that just can’t afford the mortgage and all the bills that go with it.
I regularly talk to Debtors who can’t afford the mortgage, insurance, taxes, and utilities. If it is due to loss of job and their income will be increasing soon, a Chapter 13 will be able to help them save the home to allow them to get caught up instead of being so far behind. If a Debtor can’t afford all their bills and find they have no way to increase their income, they seriously need to think of giving the house up and moving into something more affordable.
Filing a Chapter 13 does not get a Debtor out of debt. In matter of fact, it gives them another payments that must be paid each month. So, if a Debtor can’t make their mortgage payment and don’t see being able to do so in the near future, they will not be able to make their mortgage payments after filing and a trustee payment.
If a Debtor can’t afford their house and car and all other bills, they need to sit down and think about what is important to them. Sometimes giving up a car can free up enough money they can afford the house. If not, the Debtor needs to face reality. They need to find a place they can afford and try and save some money. That way in the future when they can afford a house, they will have a little money saved to purchase a new house.
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