Bankruptcy & Foreclosure
Bankruptcy
When a person or organization cannot make payments to its creditors, it can file for bankruptcy. After filing for bankruptcy, all your property except pensions and educational trusts goes into an estate managed by the bankruptcy trustee. The bankruptcy trustee has control of the property in your bankruptcy estate throughout the case and oversees all your matters. Not all of your property will be part of your bankruptcy estate. You can protect some of your property to maintain your job and household. But you can't choose by yourself which asset you want to protect; the state will make this decision.
The following assets can go to your bankruptcy estate:
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• Share of marital property
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• Property which is your possession
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• The property you’ve loaned to someone else
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• Proceeds from your property, such as rental income
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• Assets you’ll receive within 180 days after filing for bankruptcy.
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If you're at risk of being homeless due to bankruptcy, you need to contact an experienced local council as soon as possible. They will study your case and circumstances to see if you're eligible for help with re-housing. You can also challenge the council's decision if they claim you're intentionally homeless.
Foreclosure Avoidance
Foreclosure is a legal process that allows the lender to seize or sell the property or home after the borrower is no longer making mortgage payments as required. It can occur when a borrower misses monthly payments or cannot meet the other requirements and conditions in the mortgage document.
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Foreclosure is the most devastating challenge a family can face, but you can avoid foreclosure by following these simple rules:
• If you have financial difficulties and trouble making monthly mortgage payments, communicate with your lender and let them know immediately.
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• You can request mortgage modification which may result in a lower payment and an affordable mortgage. Mortgage modification may include the term loan reduction, the loan's principal balance, and the interest rate on the loan.
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• If you have trouble making your mortgage payments, you can convert your property to a rental and use rental income to pay the mortgage payment.
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• Deed-in-Lieu of foreclosure or friendly foreclosure allows the borrower to return the property to the lender without going through the foreclosure process. Still, this option needs approval from the lender.
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You can hire a qualified real estate agent to sell your property by negotiating a short sale with your lender.