Bankruptcy and Foreclosure: How Filing for Bankruptcy Can Impact Your California Home

How Filing for Bankruptcy Can Impact Your California Home

If you’re close to being in foreclosure, then filing for bankruptcy could be a good option for you. This is the relationship between bankruptcy and foreclosure.

Keyword(s): filing for bankruptcy

Foreclosure can be one of the scariest things that someone faces in life. It can result in you being kicked out of your home and all of your possessions thrown in front of your house by the local sheriff. 

In America, this is a cruel reality for a lot of people. There were over 324,000 houses foreclosed in 2022. 

If you are someone that is at risk of facing foreclosure, you do have options. One of those options is filing for bankruptcy. 

Why should you file for bankruptcy? What are the biggest benefits of using this option? 

This is your guide. 

Know the Foreclosure Process

Before we talk about filing for bankruptcy, let’s make sure that you are aware of the foreclosure process in California. This is mainly for you to make sure you know how much time you have to settle this. Plus, you can make sure that everything you have gone through so far is legal. 

In California, foreclosure takes at least 200 days after the first missed payment to enforce. What happens is that you have 120 days to catch up on your payments before you receive a Notice of Default. 

After that, you have about three months before your home gets put up for auction. If you are still not current on your loan payments after 180 days, you will receive a Notice of Trustee Sale. 

That lets you know that your home is going to be put up for auction. The notice has to get sent out at least 20 days before your auction date. So, if you receive this, you have about three weeks to get your affairs in order before your house gets sold. 

While the typical process takes about 200 days if a homeowner fails to pay their debt, there are ways it can get delayed. Sometimes, it can be because of court orders. Other times, it can be taking drastic action, such as filing for bankruptcy. 

Filing for Bankruptcy

After you get a Notice of Trustee Sale, you could start to panic about losing your home. However, there is one thing that you can do to try to delay this sale. 

Believe it or not, filing for bankruptcy can be a way to delay this sale. If your house was supposed to be sold 20 days after you got that notice, what you need to do is file for bankruptcy before the auction date. 

If you do this, then any sale that takes place after you file for bankruptcy is considered void. The reason for this is when it comes to bankruptcy, all of the assets you have at the time that you file would be under this umbrella. 

That means that certain authorities need to review these assets and your financial situation closely. In other words, you may buy an extra six weeks just for this review process. 

Depending on what type of bankruptcy you can qualify for, you may even buy several more years. 

Chapter 13 Bankruptcy

Arguably the best type of bankruptcy you can file in this situation is a Chapter 13 bankruptcy. The reason for this is that under this type of bankruptcy, you could have up to five years to make things right with your lender. 

You see, with this type of bankruptcy, the goal is to come up with a realistic payment plan over a certain time. This period ranges from 3-5 years in most cases. 

Let’s say that you owe $175,000 to a lender. In this situation, the agreement may be for you to pay $120,000 over the course of five years. That could equal a payment of $2,500 per month. 

The catch with this is that for you to qualify for this type of bankruptcy, you have to have some sort of reported income. The reason for this is that your income is used to determine if you can keep up with the agreed-upon payment plan. 

If you are a homeowner that is currently unemployed, this type of bankruptcy can be much more difficult to qualify for. However, the good news is that if you have a job, you can likely qualify as long as your debt is under $2.75 million. 

Other Bankruptcy Options

While Chapter 13 is the best bankruptcy option for this situation, there are a couple of alternatives. However, both of these will come with their catches. 

The first option is Chapter 11. Like Chapter 13, you can come up with a payment plan to pay back your debt in this situation. You can even do so for longer than five years. 

What is the catch? It is a more expensive legal process, and you typically have to pay a higher percentage of your debt. On top of this, you need a majority vote to approve your payment plan here. 

The other option you have is Chapter 7 bankruptcy. What is good about this is that it can stop foreclosure for several months. However, the catch is that this is only temporary, and once the case settles, you can end up right back where you started. 

Sell Your House

You may have successfully filed for bankruptcy and even agreed to a payment plan described above. However, you may realize that you still have a problem coming up with all of the money. 

Your bankruptcy may have bought you a couple of years, but you still need to secure the finances. One option you may consider is selling the home yourself after filing for bankruptcy to get more money for it. 

Click here to get a free offer on your home today. 

Bankruptcy and Home Sales: What Every Californian Should Know

Bankruptcy and Home Sales: What Every Californian Should Know

Have you recently filed for California bankruptcy Chapter 13? Click here to find out what every Californian should know about bankruptcy and home sales.

Keyword(s): california bankruptcy chapter 13

Staring down California bankruptcy Chapter 13 feels like a financial earthquake has just hit your life. The ground shakes, the dust clouds your vision, and you’re left wondering if your home will stand when it clears.

But before you brace for total loss, know that in California, your situation might have a silver lining. Filing for bankruptcy here doesn’t always mean saying goodbye to your home.

Whether you’re set on keeping your castle or selling your space could be your fresh start, you’ve got choices. Let’s shed some light on those choices because when it comes to bankruptcy and home sales, being in the know can be your lifesaver. So, let’s dive right in and unravel the must-knows for every Californian navigating these choppy financial waters.

The Basics of Bankruptcy and Home Keeping

Bankruptcy might make you think you’ll lose your house, but take a deep breath; there’s a good chance you can keep it. Here’s how it works in California.

When you’re up to your neck in debt and considering filing for bankruptcy, specifically the Chapter 13 kind, it’s like hitting the pause button. Instead of selling off everything you own, you get to work out a payment plan.

This plan is your roadmap for the next three to five years, helping you chip away at your debt bit by bit. It’s not a sprint; it’s more like a hike where you can still enjoy the view (your home could very well stay with you if you stick to the plan). And that plan is tailored to your income and debts, so it’s made just for you.

Keeping your property under Chapter 13 bankruptcy is a real possibility. You see, this chapter is about reorganization, not liquidation. That means your assets, like your house, don’t automatically get sold off.

Instead, you and your bankruptcy trustee work out a scheme where you pay back a portion of your debts over time. This way, you can breathe a little easier knowing that your home (your personal slice of California) can stay yours.

Selling Your Home: A Fresh Start

Maybe you’re thinking about selling your home because, let’s face it, sometimes you just need a clean slate. If you’re in bankruptcy, selling your house might still be an option, and it can be part of your financial reboot.

You’re probably asking, “Who would want to buy my place, especially if it’s seen better days?” Here’s where things get interesting.

There are companies out there (like us) that specialize in buying houses quickly and for cash, no matter the condition. Your fixer-upper could be someone else’s dream project.

Even if your home has seen better days, there’s a market for it. Selling your home doesn’t have to be a long, drawn-out affair with countless open houses and haggling over repairs. You can sell it as-is.

No staging, no fixing leaky faucets, and definitely no repainting required. Plus, going this route cuts out the middleman.

No real estate agents mean no commissions eating into your sale price. It’s just you, the buyer, and the peace of mind that comes with a fast, straightforward sale.

Filing for Bankruptcy: A Step-by-Step Guide

Thinking about filing for bankruptcy might make your head spin, but it’s actually more straightforward than you might think. Here’s what you need to know.

First, you have to figure out which chapter of bankruptcy you’re dealing with. If you’re reading this, you’re probably looking at Chapter 13, which is about making a plan to pay back your debts in a way that works for you. You’re not alone in this; the court and a trustee will help you figure it all out.

To get started, you’ll gather all your financial documents. We’re talking about things like your:

  • Income
  • Debts
  • All your monthly expenses

This paperwork helps paint a picture of your financial life. Next, you’ll submit your bankruptcy petition, and this is where you officially ask for help. Once you do that, the court steps in to put a temporary stop to any debt collectors hounding you. It’s like a time-out while you get everything sorted.

The key to filing for bankruptcy is to take it step by step. There’s no need to rush. You’ll work with a lawyer to understand all the legal stuff and make sure you’re making the best moves for your future.

And don’t sweat the small stuff. Filing for bankruptcy might seem massive now. But, it’s just one step in the journey to getting back on your feet financially.

California Bankruptcy Chapter 13: A New Chapter

Here’s the deal with California bankruptcy Chapter 13: it’s not the end, but a beginning. Think of it like hitting the reset button on your finances. It’s a chance to sort out your debts without the crushing weight of them coming down on you all at once.

This chapter is all about reorganizing what you owe and creating a manageable plan to pay it off. And as you’re making those payments, you’re learning to:

  • Budget better
  • Spend smarter
  • Plan for a future where ‘debt-free’ isn’t just a pipe dream

Facing California bankruptcy Chapter 13 might seem daunting, but it’s also a powerful step towards regaining control. You’re acknowledging the storm but also learning to dance in the rain. With a clear strategy and some dedication, you can make it through to the other side, where financial stability isn’t just a hope; it’s your reality.

When the dust settles and your bankruptcy period is over, you’ll emerge with more than just your finances sorted. You’ll have a new set of financial skills and a stronger sense of control over your money. 

Ready for a Reboot

So now you have a rundown of what you need to know about bankruptcy and home sales in California. If you’re up against the ropes with California bankruptcy Chapter 13, remember, you’ve got options, and you’ve got backup. Whether you’re aiming to keep your home or sell it fast for a fresh start, you’re in the driver’s seat.

We are Premier Property Buyers, and we buy houses in Southern California. We stand out with our aim to provide you with the highest offer possible if you want to sell your property, and we can offer cash too! Connect with us if you have any questions or info for us today!