3 Things You Should Know About Equity And Bankruptcy

3 Things You Should Know About Equity and Bankruptcy

Buying a home is a major responsibility. If you are well into your mortgage and discovering that you can no longer afford payments, though, it can seem like little more than a burden. Countless Americans make payments on their mortgage every month, but it is one of the biggest debts—if not the biggest—that most people have, and there is a reason why so many end up going into foreclosure.

According to NeighborWorks America, in fact, one out of every 200 homes in America will eventually be foreclosed. When it comes to debt relief, you may consider bankruptcy, but perhaps you are concerned about the equity—or lack thereof—that is contained in the value of your home. 

You own your equity

Generally, a homeowner is entitled to her or his equity, regardless of whether she or he is in foreclosure or has defaulted on payments. These factors can quickly diminish your equity, though, until there is little left. Lenders typically charge fees for late and defaulted payments, and this amount may be subtracted from any profit that would be gained from equity. This is one reason to proceed with debt relief as soon as you can. 

You can address negative equity

Under some circumstances, your home might be worth less than the balance you owe on your mortgage. This is referred to as negative equity, and it is a common reason for defaulting on payments. Debt relief options such as bankruptcy, though, allow you to reorganize or discharge debts so that you are not stuck making payments on a home that is worth dramatically less than it was when you bought it.

You may not have to sell

Some homeowners fear that they will be forced to sell their home when they are in foreclosure. You might also believe that bankruptcy will force you to liquidate it. Neither of these is true, though, and bankruptcy might allow you to keep your home and reorganize the debt so that it is manageable and your equity can be saved.

Categories

Family-Focused Advocates

Meet Your Attorneys
/

Why Clients Choose Us

  • Family-Run Firm
  • Free Consultations
  • 20+ Years of Legal Experience
  • No Pressure to Sign at Initial Intake

Awards & Memberships

Client Testimonials

Hear stories from the clients we have worked with in the past that we still consider family.
  • “I am extremely pleased with the service they provided: from giving me advice on how to prepare, to working with creditors, and finally to handling the legal aspects of the bankruptcy itself. They took ...”

    - Mike
  • “Deciding to file bankruptcy and going through the process of foreclosure on our home was not something my husband and I ever thought we would have to do. On our initial visit with John, he explained ...”

    - Anonymous Client
  • “This extra special note sent to you today holds more appreciation than any words can say. Over 30 years ago, I found myself in a career helping others in need. I never expected to be in need myself ...”

    - Mrs. J.
  • “Just a note to say thank you for the legal advice you gave me last week. Before I came to see you, I was scared to face my problems, but today I opened a checking account and will go to the Social ...”

    - Mrs. K.
  • “Roseanne is the best. My husband and I went with a cheap bankruptcy attorney to save money. BIG mistake. We ended up with an adversary hearing that our bankruptcy attorney couldn’t handle. So after ...”

    - Anonymous Client
/

Take That First Step With Us

Schedule a Free Consultation
  • Please enter your first name.
  • Please enter your last name.
  • Please enter your phone number.
    This isn't a valid phone number.
  • Please enter your email address.
    This isn't a valid email address.
  • Please make a selection.
  • Please enter a message.