Laws vary regarding bankruptcy and real estate
On behalf of The Rollins Law Firm posted in Chapter 7 on Wednesday, August 14, 2013.
Declaring bankruptcy may be a big decision for those who live in the state of Mississippi. People wonder if they will be permitted to keep their homes, or if they will ever have the opportunity to buy a new home. Laws vary according to state and circumstance.
While filing Chapter 13 bankruptcy reorganizes debt and may allow people to keep their real estate, Chapter 7 bankruptcy offers a completely different scenario. While people can keep their mortgages under Chapter 13, with Chapter 7, the only way anyone can keep a home is if the real estate falls into a state exemption status. For example, one may keep a property under homestead protection if the equity in the house is less than the homestead exemption. If the difference between the amount owed and the market value is greater than the homestead exemption, then the house will be sold and the lendee will receive cash in an amount equal to the homestead exemption amount.
Those who file Chapter 7 bankruptcy will experience drastic hits to their credit scores; however, it is not impossible to rebuild credit. People will have to prove that they can be trusted as far as paying back loans is concerned. By obtaining secured credit cards or obtaining installment loans, those who have gone through bankruptcy can work on increasing their credit scores.
Declaring bankruptcy is never an easy choice. A skilled Mississippi bankruptcy attorney may be able to advise people regarding what steps to take in order to obtain the best possible outcome. An attorney may be able to let people know if they will be able to keep their homes, and they can help guide them toward the most desirable filing.
Source: Bezinga, "What Bankruptcy Means in Real Estate", Simon Campbell, August 13, 2013