If you are facing foreclosure, bankruptcy may be able to help you save your home. Chapter 7 bankruptcy can delay the foreclosure by months. Filing for chapter 13 bankruptcy may even help you to save your home.
When a homeowner fails to make their mortgage payments on time, they could be at risk of foreclosure. The lender will begin the process of selling the home at auction. This process may take some time and will take many steps. The homeowner will be aware of this in advance.
This process doesn't happen over 1 missed payment. This process will usually happen when the homeowner fails to make multiple payments.
This means that the homeowner will have time to either catch up on the payments or make a new agreement with the lender. Check out our previous blog posts about bankruptcy for more information.
When you file for bankruptcy, the court will automatically issue an order that includes "automatic stay". This directs creditors to cease their collection activities immediately. If you are scheduled for foreclosure, then this will be legally postponed.
The lender can obtain permission from the bankruptcy court to proceed with the sale though. This will still give the homeowner some time though even if it's just 2 - 3 months. Bankruptcy won't automatically stop the clock for foreclosure though. Most states will require advance notice before a foreclosure sale can be held.
Chapter 13 bankruptcy lets you pay off the late payments over the length of a repayment plan you propose. You will need enough income to meet your mortgage payment at the same time that you are paying off your late payments.
Chapter 13 bankruptcy may also help you eliminate the payments on your second and third mortgage. Your first mortgage is secured by the entire value of your home. This means that you may no longer have any equity with which to secure the later mortgages.
Are you concerned about the potential to lose your home? Contact Palacios Law Group to speak with an expert real estate lawyer. We have the potential to help you keep your home!
Source: Legal Zoom