Are you considering bankruptcy due to overwhelming financial obligations? Are you worried that you may have to sell your assets in order to keep your head above water? You are not alone. Every year, millions of Americans become so financially distressed that they have to consider filing for either Chapter 7 or Chapter 13 bankruptcy.
These two forms of personal bankruptcy are vastly different. A Chapter 7 bankruptcy, also called a liquidation bankruptcy, results in the sale of all major assets by a trustee to repay the obligations owed. In Chapter 13 bankruptcy, also known as partial bankruptcy, debts are settled for an agreed upon amount and the borrower enters into a repayment plan to satisfy the creditors.
Filing for bankruptcy under Chapter 13 of the bankruptcy code is not meant for everyone. If you are planning to use the Chapter 13 of the bankruptcy code to file for bankruptcy, you have to be prepared to part with some or all of your money in order to repay your debts, in case you are financially able to do so. Chapter 7 of the bankruptcy code may require you to surrender your property and liquidate it in order to be able to repay your debts.
As a homeowner, one of the most stressful parts of the bankruptcy process is wondering what will happen to your home. In order to know whether you are eligible to declare bankruptcy under Chapter 7 or Chapter 13 of the bankruptcy code, you need to seek out the advice of a bankruptcy attorney and an experienced bankruptcy home appraiser, such as Bankruptcy Home Appraisers, who can help you obtain an accurate home valuation.
A bankruptcy appraisal from Bankruptcy Home Appraisers is a report by a certified professional that shows the current market value of your property. It provides you, your attorney, and the court an unbiased, third-party evaluation of this part of your financial picture.
So, how can you survive after filing a Chapter 7 or a Chapter 13 bankruptcy?
- Stay in touch – Stay in touch with bankruptcy team throughout this process. Your appraiser from Bankruptcy Home Appraisers and your lawyer will provide expert support and familiarize you with the trustee reports, appraisal documents, proof of claims, and any other communications that you receive from the court.
- Master your paperwork – After filing for bankruptcy, make sure you go through all the paperwork and master it. Ensure everything is completed with as much detail as possible.
- Live within your budget – A budget is essential to rebuilding your financial life—it gives you direction and a plan to follow as you generate new income. If you file for bankruptcy under Chapter 13, most of your disposable income will probably go to paying off your debts.
- Adapt quickly to changed circumstances – After a major life event, things can get out of control financially, even if you’ve stuck to your budget. Make sure you let your trustee know of any changes in your life such as the loss of a job due to illness, or a loan taken against a mortgage through your attorney.
Consult your attorney and Bankruptcy Home Appraisers to ensure the route you’ve chosen is the best possible strategy for your situation.
Appraisals are sometimes necessary when determining the secured status of a claim under section 506(a) and (b) of the bankruptcy code, or when avoiding a judicial lien under section 522(f).
Under section 506, a secured claim (e.g. a mortgage, an equity line or a tax lien) is only secured to the extent of the value of the property. For example, a house with a first mortgage balance of $400,000 and a second mortgage balance of $50,000 that is worth only $385,000. A bankruptcy appraisal would be used to make the case that the second mortgage is unsecured, and therefore its lien can be removed and it is treated as a general unsecured claim, which is much lower on the pecking order.
A bankruptcy appraisal is necessary where value is likely to be in dispute. This is when you or your attorney needs to hire the services of Bankruptcy Home Appraisers to estimate the fair market value of the home. In cases where the value makes a difference, having a qualified, expert appraiser who can give a clear testimony is important. The bankruptcy appraisal should include a well-supported, professional report that is defensible in court. State and federal laws require that the appraiser and the bankruptcy appraisal process must be independent from any influence, coercion, or pressure. This ensures that the appraiser remains a truly independent third party.
No matter your reason for filing for bankruptcy, your choice of appraiser is extremely important. You’ll want someone who can prove without a shadow of a doubt that your property value is exactly what you say it is. You cannot afford to gamble on anything less than expert service.
The team at Bankruptcy Home Appraisers will put years of industry experience and market knowledge to work on your behalf, ensuring an accurate, unbiased value of your home. Contact us today for your complimentary consultation.