If you are losing your home bankruptcy law may be able to
save you from going through a foreclosure.
While each case is different, a Chapter 7 can delay a foreclosure for
months while a Chapter 13 can enable you to stay in your home while making
payments according to your repayment plan.
Our attorneys are experts at helping families stay in their
home while navigating through the bankruptcy process. When your home is at stake, it is important
to work with experienced representatives.
One simple paperwork mistake could cause the court to not approve your
bankruptcy and your foreclosure to continue as scheduled.
Per bankruptcy law when you file for a Chapter 13 or a
Chapter 7 the court will put an “automatic stay” in place. This automatic stay informs creditors that
they need to halt all collection activities pending the results of the court
hearings. At minimum, the stay normally
lasts three to four months. In order to
have the stay lifted a creditor needs to go before the court a make a motion,
something that your bankruptcy attorney can argue against.
In a Chapter 13 bankruptcy, you and your lawyer will propose
a repayment plan. In this plan, you will
need to have enough money every month to cover your current mortgage payment
along with whatever amount you direct towards back debt payments. For example, if you are six months behind on
your mortgage and owe $12,000 you could propose that the $12,000 is paid back
over a period of five years. The court
has to approve your repayment plan and so long as they do; you will be able to
stay in your home and pay your debts back over time. This is an excellent option because it gives
you the certainty of avoiding foreclosure and being able to stay in your home
without worrying about harassing calls and letters from your lender. The important thing to remember is that you
must stay current on your mortgage loan and debt repayments going forward.
In a Chapter 7 bankruptcy, the automatic stay will continue
while your bankruptcy is being processed.
This is a liquidation where the court will evaluate all of your assets
and your debts to determine what can be sold to pay your creditors. If you want to stay in your home, your lawyer
can help to make your home a protected asset that is not liquidated. Typically, the court will agree unless you
have a large amount of equity in your home that could otherwise satisfy your
debts. At minimum, the foreclosure will
be delayed as part of the process.
Life events like losing a job or incurring large medical
bills can cause people to get behind, even on their home mortgage. Fortunately these options can help families to
stay in their homes longer. Bankruptcy law enables people to get back on their
feet when they are swimming in debt.
Whether through a Chapter 7 liquidation or a Chapter 13 reorganization,
families are able to create a plan that will help them to recover and build
their financial stability again.
