If you are facing foreclosure you may be able to file bankruptcy to stop foreclosure proceedings through a process called “automatic stay.”
Even if the process of foreclosure has already begun you may be able to stop it in its tracks, though this will depend on various circumstances. While both Chapter 7 and Chapter 13 may stop foreclosure they each affect your mortgage in different ways. Which is the best for you?
Talking to a bankruptcy lawyer may help you better understand what’s available to you. Fill out the form below to set up a free, no-obligation consultation with a bankruptcy lawyer near you.
The automatic stay is a highly valuable aspect of bankruptcy for many homeowners facing mortgage foreclosure. Under the rule of an automatic stay court order, all collection activities are immediately ceased. Among other things, this can include stopping or temporarily halting foreclosure proceedings. This offers people filing bankruptcy some extra time to figure out their next steps.
If you’re facing foreclosure, but are dedicated to keeping your house, you may wish to file for Chapter 13 bankruptcy. Under Chapter 13, homeowners have the chance to negotiate a single monthly payment plan for most of their debts, including mortgage, car loans and credit cards. This plan typically spreads payments over a period of three to five years, so to qualify for this form, you must be able to pay at least your current mortgage payment.
In certain cases, Chapter 7 bankruptcy may be a good response to foreclosure. Depending on where you are in the foreclosure process and the exemptions and laws in your state, you may be able to protect your home from a forced sale. While Chapter 7 doesn't allow you to directly address your mortgage debt you may be in a better position to make your payments with other debts eliminated.
There are plenty of considerations to keep in mind as you decide what your best option is. A bankruptcy attorney may be able to better inform you of the options available to homeowners facing foreclosure. Fill out the form below to get in touch with a bankruptcy attorney near you for a free no-obligation consultation.