Sometimes, bankruptcy looks like the best deal, but is it? This article answers basic questions homeowners in Alabama have about bankruptcy as well as address how to deal with bankruptcy in Huntsville.
How Will Bankruptcy Affect Me?
Credit Rating
If you go bankrupt, the record remains on your credit file for at least six years, making it quite difficult to obtain a mortgage or get a loan.
Pension
Savings in a pension fund are not considered an asset in bankruptcy. Therefore, the official receiver handling your bankruptcy can’t take the savings from you. However, it’s best to have a professional assess your unique situation to be doubly sure before filing.
Your Home
Declaring bankruptcy may affect your home in various ways, depending on whether it’s rented or owned.
Renting from a private landlord
If your home is rented from a private landlord, you’ll likely be able to retain your home as long as you keep posting your rent. However, if you have rent arrears, the landlord may evict you, and the debt incurred is included in your bankruptcy. Some tenancy contracts also state that in the event of bankruptcy, the tenancy is terminated.
Renting from a local authority or housing association
This plays out just like renting from a private landlord, with the only difference being that your chances of eviction are lower.
Mortgage
If you live in a mortgaged property with decent equity, the official receiver will usually sell your house in Alabama. Some of the received money is then shared among your creditors, and some are used to pay the official receiver’s costs.
Ownership
Usually, if you own your home, the official receiver wants all your equity. If it’s a jointly owned property, they want all your share of the equity.
They may either sell your home in Alabama or place a charging order on it, depending on the amount of your equity.
Protecting Your Home in Bankruptcy
To do this, you may:
1. Avoid bankruptcy
You can avoid bankruptcy in Huntsville, Alabama. Here are some healthy tips.
- Avoid incurring debts.
- Make debt repayment a top priority.
- Prioritize your basic needs: food, shelter, utilities, and transportation.
- Sell everything you can
- Consider getting professional help
- Get a second job or increase your income streams.
- Shed all wants
- Draw and follow a budget.
2. Re-negotiate your repayment schedule.
Some creditors are more forgiving than others. And who knows? Your creditors may be the most forgiving of all. There’s only one way to find out: communicate.
Be sincere and transparent. Frankly, most creditors would rather receive lower monthly payments than have you toe the line of bankruptcy.
3. Submit a consumer proposal
Rather than bankruptcy, file a consumer proposal. This way, your debts can be negotiated and paid interest-free over a period of up to 60 months. Also, you get to retain your privacy as you’re not forced to sell every asset and report every change, even minor ones, in your employment conditions.
4. Offer to a cash buyer
Another option when forced to deal with bankruptcy in Huntsville is to sell your house Huntsville to a cash buyer. That way, you sell your home fast and can pay some of your creditors. Furthermore, if you sell your property to a real estate company like Rhed Key, which offers fair cash home offers in Alabama, you may be able to pay part of your debt while you downsize your home.
Rhed Key Properties: Sell your house in Alabama fast!
At Rhed Key, we buy houses in Huntsville, AL, and we’ve given well over dozens of cash offers to homeowners within Huntsville. Whenever you’re ready to sell your property in Alabama, we will buy it at a great price.
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