Sunday, February 1, 2009

The Difference Between Chapter 7 And Chapter 13 Bankruptcy


Posted by: Connie Yee
Written by:
Pat Mertz Esswein

If you're trying to hold on to a house you can't afford, you might consider filing Chapter 7 bankruptcy. If your petition is accepted by a bankruptcy court, your assets, including your house, would be sold to satisfy creditors but all debts would be discharged at the end. Then you could rent for two years and buy again in a saner market.

Stephen Elias, a bankruptcy lawyer and author of "The Foreclosure Survival Guide" and guides to bankruptcy, says this strategy buys you time and lets you save for your next move. Your home would go through foreclosure, but you could live in it mortgage-free throughout the foreclosure -- even after it has been sold. In most states, the lender will have to legally evict you or pay you to get out.

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