Can Bankruptcy Stop Foreclosure
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Can Bankruptcy Stop Foreclosure
Some individuals ponder the decision to file bankruptcy or simply allow the mortgage lender to start foreclosure. It cannot be presumed to be a simple case of either/or as a verdict is not possible and cannot be made this easily. A mortgage lender will initiate a foreclosure proceeding if the monthly mortgage payments fail to be met. The only way of stopping this from happening is to make the payment to the mortgage lender. A mortgage loan is sort of like a car loan and if a person does not pay his car payment, he will lose the car through repossession. The rule is the same for all and is applicable to any person not paying his mortgage payments will have to forgo his residence through foreclosure.
This actions brings to a stop every civil proceeding involving the debtor during the period of his bankruptcy. So, by law, a mortgage lender has to suspend all legal actions including a foreclosure action. However, a mortgage lender can file for relief from the automatic stay, and when the relief is granted, simply proceed with the aforementioned action.
In short, bankruptcy will not allow a debtor to retain a house without paying his debt to the mortgage lender, and it will not halt the foreclosure process. Going into bankruptcy does not solve the problem; it only makes the process proceed more slowly.
While bankruptcy doesn't stop foreclosure, it gives a person time to repay or at least makes easy to repay a mortgage lender. Because bankruptcy forces a mortgage lender to stop the foreclosure proceeding, it gives the debtor additional time to come up with funds to repay the lender.
Discharging unsecured debts through bankruptcy may enable you to have more money to pay the mortgage payments. Also, a chapter 13 bankruptcy is a court ordered payment plan and allows a debtor to pay the mortgage catch up amount over a period of time.
Sadly, not every person will be eligible for bankruptcy, and even if they are found eligible, there are still legal costs. The legal costs and fees may be more than the amount needed to catch up and make current mortgage payments.
If you are of the mind that declaring bankruptcy may benefit your situation and help you get out of a foreclosure, a good lawyer should be able to answer your questions. Bankruptcy is so detailed that you should not try to handle it by yourself.