Can Bankruptcy Really Clear Your Ohio Mortgage Debt - Home Buyers Ohio

Breaking Down the Myths: Can Bankruptcy Really Clear Your Mortgage Debt in Ohio?

If you're struggling to keep up with your mortgage payments, you may be considering bankruptcy as a way to clear your debt and get a fresh start. However, there are many myths and misconceptions surrounding bankruptcy and its impact on mortgage debt.

Below, we break down those myths and provide you with the information you need to make an informed decision about your financial future. You’ll also learn how to sell your house to avoid bankruptcy in Ohio .

Bankruptcy and Its Impact on Mortgage Debt

Bankruptcy is a legal process that allows individuals and businesses to discharge their debts and start fresh. There are two main types of bankruptcy for individuals: Chapter 7 and Chapter 13.

In a Chapter 7 bankruptcy, most of your unsecured debts are discharged, but you may have to give up some of your assets to pay off your creditors.
In a Chapter 13 bankruptcy, you create a repayment plan to pay off your debts over a period of three to five years.

While bankruptcy can discharge many types of debt, including credit card debt and medical bills, it's important to understand its impact on mortgage debt. When you file for bankruptcy, you may be able to discharge your unsecured mortgage debt (i.e., the amount you owe after the sale of your home), but you won't be able to discharge your secured mortgage debt (i.e., the amount you owe on your home).

The Bankruptcy Process in Ohio

Before you can file for bankruptcy, you'll need to complete credit counseling from an approved agency. This counseling will help you determine if bankruptcy is the right option for you and provide you with information about other debt relief options.

Once you've completed credit counseling, you'll need to file a petition with the bankruptcy court. This petition will include information about your financial situation, including your income, expenses, assets, and debts. You'll also need to provide documentation to support your claims.

After you file your petition, the court will appoint a trustee to oversee your case. The trustee will review your petition and may schedule a meeting of creditors, where you'll be required to answer questions about your financial situation. If you're filing for Chapter 13 bankruptcy, you'll also need to submit a repayment plan for approval.

Common Myths About Bankruptcy and Mortgage Debt

There are many myths and misconceptions about bankruptcy and its impact on mortgage debt.

Myth: Bankruptcy automatically allows you to keep your house

One common myth is that bankruptcy will allow you to keep your home and discharge your mortgage debt. However, this is not always the case. If you're behind on your mortgage payments, bankruptcy may only provide temporary relief and may not prevent foreclosure.

Myth: You can file for bankruptcy multiple times

Another myth is that you can file for bankruptcy multiple times to discharge your mortgage debt. However, there are limits on how often you can file for bankruptcy, and the process can be expensive and time-consuming.

Can I Sell My House to Avoid Bankruptcy?

If you're struggling to keep up with your mortgage payments, you may be considering selling your house to avoid bankruptcy.

One advantage of selling your house before bankruptcy is that you may be able to avoid the negative impact of bankruptcy on your credit score. Bankruptcy can stay on your credit report for up to ten years and can make it difficult to obtain credit in the future.

Another advantage of selling your house before bankruptcy is that you may be able to negotiate a short sale with your lender. A cash home sale allows you to sell your house and get out of your mortgage, and your lender agrees to accept the proceeds as full payment. This can help you avoid foreclosure and discharge any remaining mortgage debt.

Cash Home Sale as an Alternative to Bankruptcy

If you're considering selling your house to avoid bankruptcy, a cash home sale may be a good option. A cash home sale is when you sell your house to a real estate investor for cash, usually at a discounted price. This can provide you with the funds you need to pay off your debts and avoid bankruptcy.

Benefits of a Cash Home Sale in Ohio

Quick and Easy Sale

One advantage of a cash home sale is that it can be a quick and easy process. You can usually sell your house in a matter of days or weeks, which means you can avoid the stress and uncertainty of a traditional home sale.

Sell Your House As-Is

Another advantage of a cash home sale is that you can sell your house as-is. You won't have to make any repairs or updates to your home, which can save you time and money.

Is Bankruptcy for Me?

If you're struggling to keep up with your mortgage payments, bankruptcy may be a viable option for discharging your unsecured debt. However, it's important to understand the limitations of bankruptcy and its impact on your mortgage debt.

If you're considering selling your house to avoid bankruptcy, a cash home sale may be a good option. This can provide you with the funds you need to pay off your debts and avoid the negative impact of bankruptcy on your credit score.

Sell Your House Fast in Cleveland, Ohio

If you need to sell your house fast but don’t want the hassle of a traditional home sale, contact Home Buyers Ohio. We buy houses as-is. No repairs are needed. Avoid closing costs and realtor commissions. Close in as little as seven days. Call 440-490-4600 to get a fast cash offer from our local home buyers in Ohio.