Denton County Bankruptcy Attorney: After I finish filing a bankruptcy case for my clients, I like to be able to look at their financial situation and know that they are better off than before they walked into my office. My clients are almost always less stressed, happier, and better able to meet their financial obligations once their case is filed. This means they are also better able to face their other challenges as well, because let’s face it, money problems are stressful, and can completely distract us from more important things in our life, like family, church, and community.
On occasion, I don’t feel as good about filing a bankruptcy case. I look at my client’s new budget and I think to myself that their life isn’t getting easier, and they are going to struggle making their bankruptcy case work. Usually this happens in the following scenario. A client comes into my office to file Chapter 13 bankruptcyin order to stop a foreclosure on a house. They are generally four or more months behind on their house payments and have very little equity in their home. In the recent past they lost their job or experienced a permanent decrease in their income, which has made it impossible to make their house payments. Despite their change in financial circumstance, they wish to file bankruptcy to stop their home from being foreclosed.
I’m going to explain some realities that we all have to face. First, we are not entitled to live in a house for which we cannot afford the mortgage, just because we have been there a long time. Second, we all have to learn to live within our means, and sometimes that means moving into an apartment or a smaller home than we are used to. Third, filing bankruptcy does not always guarantee that you will be able to save your home. In Chapter 13 bankruptcy, you have to continue to make your house payment each month. The mortgage arrears can be cured by repaying them through a Trustee over five years, but they do have to be paid back. That means that if you couldn’t afford your house payment before, and your income hasn’t increased and you have no reason to believe it will increase in the near future, then you probably will not be successful in a Chapter 13 bankruptcy case in which you have to pay a trustee payment in addition to your regular mortgage payment.
When I meet clients in this type of situation, I will file their case even when it appears unlikely on paper that it will be successful. I respect their determination and desire to save their home, and I want to give them every opportunity to make it happen. I do try and explain the difficulties that they will face. I try to explain that although moving into a smaller home doesn’t sound appealing, living in a smaller home without the stress of a huge mortgage will probably make them happier than living in a bigger home with all the stress that comes with it. If you are facing a foreclosure, don’t focus so much on stopping the foreclosure. Consider overall what changes to your financial situation will make you happiest. If the answer is still that you want to save your home and believe that you afford your mortgage payment moving forward then Chapter 13 bankruptcy is probably a good solution for you. But when take an honest look at your financial situation, and you acknowledge that you cannot afford your home; it is time to consider other alternatives for dealing with your debt.
If you are struggling with your financial situation, consider asking advice from someone who specializes in helping people cope with their debt. The Wright Firm offers assistance in many types of representations for Debtors, including bankruptcy and assistance with loan modification.
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