When your financial situation has gotten to the point where you have not been able to pay your mortgage for a few months, you may receive a notice of default. This means the lender has decided to foreclose on your home. Try to work out some type of repayment plan with the lender. However, if you cannot come up with something you can both live with, you may want to talk to a bankruptcy attorney. If you do qualify for bankruptcy, there are a few things you should know when it comes to stopping a foreclosure.
If you file a Chapter 7 bankruptcy, there is an automatic stay placed on all your debt. This means that your creditors cannot demand payment or do anything with your account while the stay is in place. However, a creditor may file a motion for relief from the stay. If the mortgage lender files this motion, and it is granted, the foreclosure will continue. Of course, the lender can also just wait until the stay is dropped when the court determines what debts will be dismissed with the bankruptcy. Loans that are secured with some type of tangible property are not dismissed. Because your home secures the mortgage, it will not be included in the bankruptcy. Once the court dismissed your unsecured debt, the mortgage lender can continue with the foreclosure. However, having gone through a bankruptcy, you should now be in a better financial position and may be able to negotiate a way to repay the past-due amount with the mortgage lender and bring your loan current, thus stopping the foreclosure.
You may have better luck with a Chapter 13 bankruptcy. Instead of having your debt discharged entirely, the court will appoint a trustee to work with your creditors to restructure the loans. When it comes to your mortgage, the trustee will set up a repayment plan for any arrears. However, you will need to start paying the mortgage again to keep them from going through with the foreclosure. If you have any equity loans or second mortgages, these can be restructured along with your other unsecured debt. Your trustee will work with both you and your creditors to find a way to ensure that your income will be sufficient to make payments on each account while leaving you enough money to pay for food, clothing, and other necessities. The trustee may also talk with the mortgage holder and find a way to lower your monthly payments.
The first thing to do is sit down and talk with a bankruptcy attorney such as Jeffrey S Arnold Attorney At Law P.C. Your attorney might be able to help you find a way to stop the foreclosure and then work out a way to keep your home.Share