Is your lender threatening to foreclose on your home? You aren’t the only one in this difficult situation. Foreclosure rates across the nation are high and they have been high for some time. Yet homeowners who are facing foreclosure often feel like they have no viable options to stop the process. However, this isn’t necessarily true. There are a number of foreclosure defense strategies that may be beneficial, one of which is bankruptcy.
The Foreclosure Process Takes Time: If you are past due on your mortgage payments, you will probably have some time before your lender starts to talk about foreclosure. Many creditors wait several months before they take any sort of foreclosure action against a homeowner in arrears on their mortgage. But homeowners struggling with their payments should not delay. The best time to consider your options is before the lender takes action; before the foreclosure process starts. That doesn’t mean that you don’t have any options once the foreclosure begins, but it’s best to take advantage of all the time you have available to prepare your response to the situation.
How Bankruptcy Can Stop the Foreclosure Process: Bankruptcy is a word that brings up negative feelings, thoughts and associations for most consumers. It’s a financial step that most do not want to think about, much less actually take. But when stuck in impossible economic situations, bankruptcy may be the best option and can have a positive result. Filing for Chapter 7 or Chapter 13 bankruptcy results in the court issuing an automatic stay order providing you, the filer, with relief from the collection efforts of creditors. Once you file and the automatic stay is issued, creditors are required to stop attempting to collect on any debts you owe. Since mortgage lenders are creditors, this includes the foreclosure process. Lenders are prevented from continuing with the foreclosure process once the automatic stay of bankruptcy is issued without court approval or the bankruptcy case is completed.
How Bankruptcy Can Save Your Home: Struggling homeowners who want to save their home can consider filing for bankruptcy. Filing Chapter 13 bankruptcy is an option for those who have an income but are struggling to make their mortgage payments. Chapter 13 bankruptcy filers would need to keep up with their repayment schedule and their mortgage payments. Filing a Chapter 7 bankruptcy means a petitioner may receive a discharge of all debt, but it may not stop a lender from taking the filer’s property. In some areas in the country, the bankruptcy courts allow us to file a bankruptcy to stop the progression of the foreclosure action, and then they allow us to submit for a loan modification in front of the bankruptcy judge.
If you are facing foreclosure or you fear that foreclosure is in your future, please don’t delay. Get in touch with an experienced bankruptcy attorney at Aronow Law PC as soon as possible. You may have more options available to you than you know and the sooner you get in touch the more likely it is that we can assist you in saving your home from foreclosure.