No matter the circumstance, no individual wants to declare bankruptcy. In addition to the complex litigation process, filing bankruptcy disrupts your life in a variety of other ways. You will no longer have control of your finances, properties, and assets.
In addition, there will be damage posed to your credit, and subsequent difficulty purchasing another home or starting a business in the future.
However, when you cannot afford your mortgage payments for consecutive months in a row, you may have to consider filing bankruptcy to stop the foreclosure of your home.
With the assistance of an experienced lawyer, you can learn how to stop foreclosure and take back control over your life.
When a lender begins the process of filing a complaint to take possession of your home, a long and complex litigation procedure follows.
During this time, a homeowner can consider their options for battling the foreclosure. This consists of renegotiating the original loan. Or, selling the home for equity to be used to pay off the debt, or filing for bankruptcy.
When faced with losing your home, filing for bankruptcy probably does not seem like a very viable solution. Rather, it is probably the last thing on your mind; however, when one files for bankruptcy during the litigation process, they may actually be able to save their home.
If you qualify for bankruptcy, a legal action known as “automatic stay” goes into effect immediately.
In this instance, you will no longer be pestered by creditors or face the possibility of being booted off of your property–at least until the automatic stay ceases.
If your home has already been scheduled for auction, the sale is postponed for the entirety of the time that automatic stay is in place, which usually lasts about three to four months.
Due to the requirements of Chapter 7 bankruptcy, which states that your lender can liquidate all non-exempt properties and assets to repay debts, this may not be the appropriate plan for keeping your home.
However, if your home does qualify as exempt from liquidation, then the court will sell off your other assets until the lender receives the full amount owed.
More likely than not, your best shot at keeping your home and stopping foreclosure is filing for Chapter 13 bankruptcy. If your income and the amount you owe meet the requirements for filing, then you can negotiate a repayment plan with your lender–while keeping your home and other assets.
As long as you make every payment while also keeping up with your mortgage payments, you can avoid foreclosure entirely.
Most debtors cannot keep up with payments and thus face foreclosure due to other debts that they hold.
Therefore, by filing for Chapter 13 bankruptcy, these debts are wiped out, and what you are left with is an achievable payment plan for the money you owe towards your mortgage.
Many homeowners worry about the negative effects that filing for bankruptcy poses to your credit score. However, one must remember that foreclosure damages your credit score as well, and one of the greatest differences between filing for bankruptcy and undergoing foreclosure is that foreclosure does not erase any debt.
Therefore, bankruptcy may be your only option for keeping your home and rebuilding your life.
Do not begin the process of defending your home from foreclosure alone.
Furthermore, never simply give up and allow your home to be sold off at auction. Your home is your greatest investment. A foreclosure lawyer can make you aware of all possibilities for saving your home.
Filing for bankruptcy when you are already dealing with foreclosure may seem counterproductive.
However, bankruptcy may save your home and provide you with an achievable repayment plan. Therefore, when seeking assistance from a lawyer, discuss this possible solution for avoiding foreclosure.
It’s important to hire an experienced foreclosure attorney when you’re facing foreclosure, or even if you are experiencing these warning signs.
This is because there are many different types of bankruptcy. Only an experienced lawyer will know which one would work best for your specific situation.
It might seem like it makes sense to do this yourself. But most people don’t have the time or patience to understand all of the details involved in bankruptcy. That means they make mistakes by not choosing the right type, or by not filling out paperwork correctly. Both things could lead to delays and ultimately hurt your chances of getting any debt relief at all.
This is not a journey to take lightly, but it is also not one to take alone. If you need to file for bankruptcy, reach out to us today to start your journey with us.
If you want to learn more about the options you have, call us for a free consultation.
Parker and DuFresne