Bankruptcy can be devastating to a person’s finances, credit rating and self-image. For homeowners, it can create an additional nightmare. A bankruptcy does not remove the lien from the property, just the liability. The lender can still foreclose on the property. You can reaffirm the loan, but some lenders may give out incorrect information regarding reaffirmation or obtaining a new loan.
Obtaining a new loan on the property can be an equally arduous process. Many lenders see the bankruptcy and assume the new loan will not be paid, regardless of the homeowner’s payment history. Without a new loan, the homeowner may lose the property.
Depending on the homeowner’s state of residence, there may be different avenues to try. These avenues are often detailed and must be followed to the letter, and there is no guarantee that they will work. The homeowner may be able to go to court to get a reaffirmation of the loan, but this could be a huge liability.
Filing for bankruptcy is a last resort option for many homeowners. For many, it can create a fresh financial start for those struggling with debt. In Mississippi, the services of a licensed attorney can prove to be invaluable. He or she could give advice about filing for bankruptcy, the rights of a debtor and homeowner and ways to keep a home and deal with a challenging financial situation. The attorney may also be able to advise you about mortgage modification, asset liquidation as well as help stop creditor harassment. Bankruptcy may feel like the end of the world when it happens, but it can also be seen as a chance to reassess spending habits and change the trajectory of someone’s life.