Hurricane Harvey and Bankruptcy

Hurricane Harvey and Bankruptcy

Those affected by Hurricane Harvey could be eligible to have their debts discharged. Filing for Chapter 7 or 13 bankruptcy might provide relief during this difficult financial time.

The devastating hurricane that hit Houston and the surrounding areas this past summer left our community in disarray. The storm and subsequent flooding caused significant damage to homes and many families in the area are still dealing with the impact of the storm.

Our community is grateful for the assistance and support that have poured into the area since the storm. People all over the country were willing to help, and the state and federal government relaxed a number of requirements in an effort to make the recovery efforts easier.

A variety of financial assistance is available to those affected by the storm, including Home Disaster Loans which are intended to provide financial support to homeowners for repairing and/or replacing damaged real estate and personal property. FEMA has provided additional assistance. Homeowner with mortgages from Fannie Mae or Freddie Mac could be eligible for mortgage payment waivers up to 12 months, waived penalties and late fees, and other assistance. Foreclosure efforts were temporarily halted on some mortgages.

Unfortunately, some of these programs require applicants be in decent financial standing and the approval process can lengthy because of the number of people who have applied. In the meantime, many people who suffered damage in the storm are dealing with crises related to their mortgages and other financial matters. The initial threat of the storm and flooding have long since passed, but those in the area are still feeling the effects.

Bankruptcy Could Be the Answer

Many homes in the area suffered enough damage that they are uninhabitable. This means homeowners, who likely have mortgages and still owe tens of thousands of dollars on their homes, are unable to return to and live in their homes. Even if they wanted to invest the time and money into repairs and renovations, the homes were so damaged that fixing them is not an option.

What can you do if your home was severely damaged by Hurricane Harvey?

One solution is to file for bankruptcy.

Typically, bankruptcy liquidates your assets to pay your creditors at least a portion of your total debt. In Chapter 13 bankruptcy, you reorganize your debt and commit to a payment plan that makes it possible to retain ownership of many of your assets. As a victim of Hurricane Harvey and the flooding and home damage the storm caused, you could be eligible to file for either a Chapter 7 or Chapter 13 bankruptcy.

In Chapter 7, your debts will be discharged. Filing for Chapter 7 bankruptcy under “normal” circumstances means your home is sold by the trustee and the proceeds are used to pay your debts. Most homeowners opt for Chapter 13 to avoid the loss of their home, but this might not be necessary if your home is damaged beyond repair from the storm. It might be possible for you to file for Chapter 7 bankruptcy and have the majority of your current debt load discharged.

If you prefer to retain ownership of your home, you can opt for Chapter 13. This allows you to continue living in your home and ensures that foreclosure efforts won’t affect you. It can also help you re-organize other debts and make it easier to deal with financial struggles during this difficult time.

Seeking Legal Assistance for Bankruptcy after Hurricane Harvey

The most important thing to realize in the aftermath of one of the most devastating storms to hit our country and the most devastating to ever hit Houston is that you are not alone. There are thousands of people like you facing the same challenges and frustrations.

Resources have poured into the area in the weeks and months following the hurricane, and legal support is no exception.

According to the Dallas Morning News, the Texas Access to Justice Foundation, Texas’s primary legal aid funding source, created the Hurricane Harvey Legal Aid Fund. The fund has raised more than $175,000 and is offering grants totaling $800,000. Attorneys from throughout the area have provided guidance and direction to those who need it. There is no reason why anyone affected by the storm and the flooding that occurred in its aftermath should not seek the legal support he or she needs.

It can be difficult to determine the best course of action when you’re dealing with the fallout from a natural disaster. Working with a local firm is always a better option than one that has no link to the area. Many of the area’s law firms are owned by and employ people who were also affected by the storm and who understand just how much of an impact it had on the area. This compassion and understanding is something that can only come from someone who experienced the situation as you did.

Is Bankruptcy Right for Me?

Choosing bankruptcy can be a challenging decision, but it can also be one of the best ones you ever make. It can relieve you of your debt obligations and make a very difficult time just a bit better. At the very least, it’s an option you should consider as you explore the various programs and financial support available.

Sadly, even if you are eligible for support or assistance from the government or community programs, it can take months or years to receive the money to which you are entitled. Bankruptcy can begin to help you immediately, but stopping collection efforts, including foreclosure.

The most important thing you can do if you were affected by Hurricane Harvey is to speak to someone who can help you make the best choices based on your circumstances. Whether it’s bankruptcy or pursuing other avenues of support, it’s important you have all the information you need to make an educated decision that is truly in your best interest.

For more information or to discuss your options with an experienced legal professional, contact contact us at 1.800.220.4318 to schedule a consultation.