Can Filing for Bankruptcy Stop a Foreclosure on your Home?
There are many different reasons why people fall behind on their house payments including:
* Losing their job
* Hours being cut
* A divorce
* The death of a financial provider for the household
* Medical problems that prevent a person from working
* The increased cost of other living expenses
Regardless of the reason why though, when you get behind on your house payment it can seem like it is impossible to get it caught up again. When that occurs the lender may file for foreclosure and you could lose your home. Many people are desperately looking for a way to prevent that.
Chapter 13 Bankruptcy versus Chapter 7 Bankruptcy.
There are many types of bankruptcy that a person can file for. One of them is know as Chapter 13, and it is designed to help prevent a foreclosure on a home. However, many people don’t realize that very important fact. Chapter 7 bankruptcy is more commonly filed. However, it leaves that door open for the assets to be sold in order for the creditors to get their money.
When a person files for Chapter 13 bankruptcy what is referred to as an automatic stay will be immediately in place. This puts a halt to the foreclosure process no matter where in the process it happens to be at that point in time. The goal is to give the homeowner time to work out some type of repayment plan that will get the balance current and give them another chance to keep their home.
Find a Qualified Attorney to help you File for Bankruptcy and Stop Foreclosure of your Home
The laws relating to filing for Chapter 13 bankruptcy as well as foreclosure can be hard to follow if you aren’t an expert on the laws. You need to get yourself a qualified attorney that is going to take care of things for you. Make sure you are able to work well with that representative. You need to make sure you understand the process and that you do everything required by law. Otherwise you could end up losing your home when you were doing your best to prevent that from happening.
Some of the Basics that you need to Understand
With Chapter 13 bankruptcy though you need to understand the basics of it. For example you will have 15 days from when you file to come up with a plan of action that is acceptable to the courts. It must include your income, your living expenses, and your repayment plan to get back on track.
This is very important because if you miss any payments once that repayment plan has been approved the automatic stay can be discarded. This means that the creditor could continue with the foreclosure process at that point. Therefore you don’t want to get yourself involved in a plan that you realistically can’t commit to in the long term scheme of things.
Early Action can Prevent Foreclosure
Do your very best to stay current on your home mortgage payments. If you do get behind for some reason, contact your lender. They may be able to help you break up the amount due into smaller payments until you get caught up. If you have too high of a payment you may be able to refinance at a lower rate of interest or to extend the number of payments. This will get you a lower price you have to pay each month.
Many people assume that their mortgage has to be 90 days in arrears before foreclosure can start. However, the laws are different in various locations. In some states it can start as early as 16 days past due. Should you find that you do need to file for bankruptcy to prevent a foreclosure make sure you do so as soon as possible and that you have the right representation for it to go well.
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