If you are facing foreclosure, a bankruptcy attorney can help stop the process. It is important to consult with a lawyer right away if you feel that the bank is about to start a foreclosure action. Once they have filed a motion to foreclose with the court it is more difficult to stop the process. The Travis Law Firm helps families throughout California to stay in their home while navigating through bankruptcy proceedings.
There are two main types of bankruptcy, a Chapter 7 and Chapter 13. Once you file with the court, an automatic stay is put in place so that your creditors cannot continue their collection action until the court has sorted things out. This is a huge benefit for families that want to find a way to stay in their home but are overwhelmed by the constant collection calls and being behind on their bills.
Consulting a bankruptcy attorney is the first step in the process. We can make recommendations on which type of bankruptcy you should file based on your current financial situation, needs and goals. Filing correctly is essential for stopping foreclosure and time is of the essence so do not delay in contacting us.
Chapter 7
A chapter 7 is the most commonly known bankruptcy because it liquidates your assets in order to wipe out your debts. In this scenario, the court appointed trustee will review your documents to determine how much money your creditors would receive if your assets were sold off to pay them. It is understood that they will not get what is owed to them but hopefully they get something. If you have a lot of equity in your home, the trustee may require it to be sold. Typically those facing foreclosure do not have a lot of equity so selling it would not help the situation. When this is the case, you can request for it to be exempt from the proceedings. The trustee will make their determination in part based on your ability to keep paying the mortgage. If your other debts were wiped out could you pay your mortgage on time? If so, you have a good chance of being able to keep your home.
In this scenario, the lender will often take the amount that you owe in back payments and interest then attach it to the end of the loan. This allows you to make payments on time going forward. Once your bankruptcy is finalized you still have to make these future payments on time. If you don’t there is nothing stopping the lender from foreclosing again.
Chapter 13
This type of bankruptcy allows you to create a settlement plan and make payments to your lenders. They typically have to agree to a reduced payoff amount and your bankruptcy attorney will make a proposed payment plan to the trustee. This plan needs to be realistic, and the trustee needs to feel confident in your ability to make the payments over a period of time. This usually lasts for three to five years. If you want to keep your home, the payment should be included in your ongoing monthly payments.
To learn more contact The Travis Law Firm by calling (951) 274-9501.
