Foreclosure is a legal action that results in a lender getting a judgment against a homeowner. In most cases, homeowners who go through foreclosure actions have to forfeit their home to the mortgage company. They also often owe the difference between the amount they owe on their mortgage loan and the amount the house sells for at auction. Depending on the value of the house and the amount of equity the family has in the house, the difference could be tens of thousands of dollars. Families who don’t have the funds to make their monthly mortgage payments aren’t likely to be able to pay this enormous bill or the taxes that go along with it.
For most people, Chapter 7 in Dayton OH is the most appropriate solution to this problem. When the family does not have the resources to keep the house, bankruptcy could help them get a fresh start without having to worry about outstanding debt related to their previous mortgage. A family concerned about their credit score taking a hit by filing for bankruptcy protection should consider the damage a foreclosure does to their credit. In many cases, the damage is similar and with bankruptcy, other debts may also be discharged, giving the family more disposable income to get back on their feet.
Homeowners may be able to gain some time to figure out their next steps if they file bankruptcy early in the foreclosure process. Although they may likely still need to move out of their house, they may be able to secure a rental home before the foreclosure shows up on their credit report. This time can be invaluable when it comes to finding a new home in a desirable neighborhood. Many landlords are hesitant to rent their apartments to people who were not able to pay their previous housing expenses. This short period of time, called an automatic stay, begins when the Chapter 7 in Dayton OH is filed and continues until the court grants the lender permission to proceed with the foreclosure action. An attorney who focuses on bankruptcy might help a homeowner examine their options and choose the right path for their family.