Being engulfed in a bad financial situation can cause many homeowners to short sell their homes to try to dig their way out of their financial difficulties. Unfortunately, even after a short sale alleviates someone from their mortgage payments, they may still be entrapped in debt. Bankruptcy protection may be the solution for certain Maryland consumers.
An example of this financial situation is a man who had a short sale on two homes. At some point in time, the man and his wife ended up incurring credit card payments of $1,000 per month, which was more than they could handle. Since the man is facing an extreme financial dilemma, bankruptcy may help him and his household get back to having their finances in order. There are different types of bankruptcy options depending for him to choose from.
The most popular bankruptcy filing is a Chapter 7. or a total liquidation. This case typically takes approximately six months to be finalized. A Chapter 13 is a re-organization plan. This is a suitable option for an individual who has above average income and is in a threat of foreclosure. A Chapter 11 is primarily for business owners who develop a plan to pay off their debts within a certain time frame.
In the past, bankruptcy protection had been cast in a negative light since it stays on someone’s credit for 10 years. In more recent years, however, bankruptcy has become a more common option for people, particularly those who are facing foreclosure or are in a rough financial shape. It gives consumers an opportunity to have a fresh start and rebuild their credit profile. Maryland consumers can benefit from gaining knowledge about bankruptcy to ensure a positive financial future.
Source: Sparks Tribune, Should I file bankruptcy after I short sell my house?, Annie Christian, Jan. 10, 2014