Can Bankruptcy Stop Foreclosure
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Can Bankruptcy Stop Foreclosure
Can bankruptcy stop foreclosure? Yes it can, if you do it the right way. When you file a Chapter 13 bankruptcy petition an automatic stay is granted. This means that all creditors must stop any collection action against you. If your house is currently in foreclosure, the bank has to halt all proceedings. A petition can be filed up until the date of your foreclosure sale. But you don't want to wait that long.
Ideally, after you miss your first mortgage payment you want to notify the bank and see if there is something you can work out. Most likely if you’re reading this you've passed that point; but did you know that there are still other options besides bankruptcy to stop foreclosure. If you’re less than two months late on your mortgage payments, your current lender may be willing to renegotiate your loan into a longer term or refinance.
If you've looked into refinancing, a foreclosure loan or other private party lenders, and still have had no luck, then you can turn to bankruptcy to stop foreclosure. A Chapter 13 bankruptcy is a reorganization of debt. After you file the petition, you must propose a repayment plan to make up the arrears on your mortgage. Chapter 13 can also help with an automobile that is about to be repossessed or has been repossessed. Depending on your income, you may have to pay some unsecured debt back also.
Get with an attorney who is familiar with using bankruptcy to stop foreclosure. Do not feel bad about filing bankruptcy, go into it with a clear conscience. If you can afford it, you want to do everything you can to keep your home, and bankruptcy may be your only way.
Keep in mind that after you have filed you have to continue making your required payments. If you do not, the stay may be lifted and your original creditors may start back using methods to get you to pay.