May 29, 2023

Bankruptcy in Missouri: Can It Help You Clear Mortgage Debt?

Are you currently struggling with mortgage payments? Have you considered bankruptcy as a potential solution? Bankruptcy is a complex legal process that can provide relief for individuals facing overwhelming debt, including mortgage debt. In this article, we will explore how bankruptcy can help you clear your mortgage debt in Missouri.

How Bankruptcy Works in Missouri

Bankruptcy is a legal process that allows individuals or businesses to eliminate or restructure their debts. In Missouri, bankruptcy is governed by federal law and is typically filed in a federal court. There are two types of bankruptcy available to individuals: Chapter 7 and Chapter 13.

  • Chapter 7 bankruptcy, also known as liquidation bankruptcy, involves selling off certain assets in order to pay off creditors. In Missouri, you may be able to keep some of your assets, including your home, through exemptions.
  • Chapter 13 bankruptcy, on the other hand, involves creating a repayment plan to pay off creditors over a period of three to five years.

The Impact of Late Mortgage Payments on Your Finances

Late mortgage payments can have a significant impact on your finances. Not only can they damage your credit score, but they can also lead to foreclosure. Foreclosure occurs when a lender takes possession of your home due to nonpayment of your mortgage. This can result in the loss of your home and a significant hit to your credit score.

Bankruptcy can provide relief for individuals struggling with late mortgage payments.

  • In Chapter 7 bankruptcy, you may be able to eliminate unsecured debt, such as credit card debt, medical bills, and personal loans. This can free up more of your income to pay your mortgage.
  • In Chapter 13 bankruptcy, you can create a repayment plan to pay off your mortgage arrears over a period of three to five years. This can help you catch up on missed payments and avoid foreclosure.

How is Chapter 7 Different From Chapter 13 Bankruptcy?

The main difference between Chapter 7 and Chapter 13 bankruptcy is how they treat your assets.

  • In Chapter 7 bankruptcy, some of your assets may be sold off to pay your creditors. In Chapter 13 bankruptcy, you create a repayment plan to pay off your creditors while keeping your assets.
  • Another key difference is the eligibility requirements. To file for Chapter 7 bankruptcy, you must pass a means test to determine if you have enough disposable income to repay your debts. Chapter 13 bankruptcy does not have a means test, but you must have a steady income to create a repayment plan.

Selling Your House to Avoid Bankruptcy

If you are unable to keep up with your mortgage payments and do not want to file for bankruptcy, you may consider selling your home. Selling your home can help you avoid foreclosure and the negative impact on your credit score.

If you do decide to sell your home in bankruptcy, a cash home sale may be a good option. Cash home buyers are private companies that buy homes for cash. They can typically close the sale quickly, allowing you to avoid foreclosure and move on with your life.

One of the benefits of a cash home sale is that you can sell your home as-is. This means that you do not have to spend money on repairs or upgrades in order to sell your home. Cash home buyers will purchase your home in its current condition.

The Process of Selling Your House for Cash

Once you find a reputable home buying company, you will need to provide some basic information about your home. The company will then make an offer on your home.

If you accept the offer, the home buying company will schedule a closing date. At the closing, you will sign the necessary paperwork and receive the cash for your home. The entire process can be completed in as little as a few days.

Working With a Bankruptcy Attorney

If you are considering bankruptcy or selling your home in bankruptcy, it is important to work with a bankruptcy attorney. An experienced attorney can help you navigate the complex legal process and ensure that your rights are protected.

Bankruptcy can provide relief for individuals struggling with mortgage debt in Missouri. Whether you choose to file for Chapter 7 or Chapter 13 bankruptcy, or sell your home for cash, it is important to explore all of your options and work with a reputable professional.

If you are considering bankruptcy or selling your home for cash, contact a bankruptcy attorney or cash home buyer today to learn more about your options.

Sell My House Fast in St. Louis, Missouri

If you need to sell your house fast but don’t want the hassle of a traditional home sale, contact Paramount Realty Group. We buy houses as-is. No repairs are needed. Avoid closing costs and realtor commissions. Close in as little as seven days. Call 314-472-8937 to get cash for your home from our local home buyers in Missouri.

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