When you've fallen behind on your bills, and you know the debt collectors are after you, checking the mailbox and picking up the phone become a scary proposition. If you're in dire financial straits, you may be losing sleep at night or feeling stressed all day. If that sounds like you, here are two important things to remember: (1) there is a way out and (2) there are limits on what a creditor can do to collect your outstanding bills.
Foreclosure happens when a homeowner fails to pay their mortgage. It is a legal process by which the lender attempts to recover the loan the borrower owes them if the borrower has stopped making their payments to the lender. In this scenario, your house will be used as the asset to pay off your debt. You will be asked to move out of your house.
Simply put, bankruptcy is a solution to the problem of having debts that you will never be able to pay back. Therefore, in certain situations, it may your best option for overcoming financial trouble. If you are an individual with few or no assets or a small business owner, Chapter 7 bankruptcy may be your best option
If you find yourself considering whether bankruptcy is the best way to address your debt problems, your biggest concern may be whether you will lose your house.