How Bankruptcy Can Stop Foreclosure On Your Home
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Economic times have been tough, and unfortunately many people have been forced to give up their homes. If you have fallen behind on mortgage payments, then bankruptcy might be a solution. In many cases, filing for bankruptcy can delay or stop foreclosure on your home.
Even if you are eventually forced to give up your home, bankruptcy can help make the process less painful. A reliable attorney with experience in foreclosures and bankruptcy can guide you through this process.
How Bankruptcy Protects You
Many people have the misconception that declaring bankruptcy means that you will be left out on the street. However, the truth is that bankruptcy protects you from having to leave your home or buys you time to find a new place to live. Once the bankruptcy petition has been filed an automatic stay is placed on all of your debts. This means that all creditor actions to collect payment must be halted – so no more letters or phone calls from debt collectors.
The automatic stay includes any efforts to foreclose on your home. Even if you home is up for foreclosure sale, the automatic stay can delay or stop the process. The automatic stay on foreclosures ends when the bankruptcy process is finished or if the lender gets court permission to continue with foreclosure (permission to “lift the stay”).
Chapter 13 Bankruptcy And Foreclosure
In Chapter 13 bankruptcy the debtor agrees to pay down part or all of their debt over a set period of time, typically around five years. This process is monitored strictly by a bankruptcy trustee, and at the end of the term all remaining debt is discharged or “wiped clean.”
In Chapter 13, you agree to pay off, in installments, the amount you owe over a set period of time. However, you must continue to make regular mortgage payments as scheduled. It might turn out that you do not have enough income to cover these obligations and will eventually have to give up your home. A good bankruptcy lawyer can make sure you make the right decisions and that all your rights are protected during the process.
Chapter 7 Bankruptcy And Foreclosure
In Chapter 7 bankruptcy, your debts are paid down from proceeds generated by the sale of non-exempt assets. In this case, the foreclosure process is delayed for up to four months. However, once the stay is lifted the foreclosure process can continue. During the four month delay, you can either find money to continue paying off your mortgage or look for another dwelling. One advantage is that during the four month wait you can live in your home for free.
It is important to know that the lender can request to proceed with foreclosure despite the bankruptcy filing. If this request is granted, the time you have to find a new place to live will be reduced.
If you are facing the possibility of foreclosure on your home, then bankruptcy might be a solution. Good legal counsel, experienced in bankruptcy, will ensure that your case is handled appropriately with your best interests in mind.
Call Today For A Free Consultation
Contact Sirody and Associates at (410) 415-0445 for a FREE Consultation and advice from attorneys that specialize in bankruptcy law. Let our attorneys work to get you back on your feet.
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