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Is it a Good Idea to File Chapter 7 Bankruptcy in Missouri and Illinois after a Foreclosure?

Some folks out there are under the impression that only Chapter 13 bankruptcy can help you deal with a foreclosure. While Chapter 13 may be the only way to stop a foreclosure, a chapter 7 can actually help you with the aftermath if you have decided to let your home go to foreclosure.

If you aren’t clear on the foreclosure process, here is a quick recap: If you fall more than 90 days or so behind on your mortgage payment, the bank will send you a notice of foreclosure. At that point, you can call your lender and see what your options are but, if you are considering loan modification, most are finding that loan modification isn’t really an option. (You can download my free report here!) The best option is probably Chapter 13 bankruptcy. If you choose not to stop your foreclosure, your home will be sold at auction. If your home doesn’t sell for as much or more than you owe on your mortgage, you will owe the difference (called a deficiency balance.) Your creditors will then attempt to collect that debt—using whatever means possible. Often, they garnish your wages or levy your bank accounts.

As you can see, you aren’t necessarily free and clear from the debt once you have let your home go to foreclosure. Luckily, Chapter 7 bankruptcy can eliminate any deficiency balance that you still owe your mortgage company—and get you credit card debt help, stop any wage garnishment, and eliminate the rest of your debt.

It is definitely a good idea to at least get educated on all of your options when facing foreclosure. A St. Louis Missouri or Fairview Heights Illinois bankruptcy attorney can help you determine the best option for your specific situation and get you protection from foreclosure—or afterwards. Still asking yourself, “Should I file bankruptcy?” or wondering when to file bankruptcy? Request a free copy of my Missouri and Illinois bankruptcy book, “Get Out of Debt: Secrets Your Creditors Don’t Want You to Know.” It may be just the information you need to survive your St. Louis or Southern Illinois foreclosure.

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