Sometimes people have to choose between filing bankruptcy or letting their mortgage lender foreclose on their property. However, it is not as simple as a case of either /or and a decision cannot be made this easily. A mortgage lender will initiate a foreclosure proceeding if the monthly mortgage payments fail to be met. There is only one way to stop this from happening and that is pay the mortgage lender. The loan for a mortgage is similar to an automobile loan; when an individual fails to make his automobile payment, the vehicle is taken from him by being repossessed. If you fail to make your monthly mortgage payments you too, could lose your home to foreclosure.
This actions brings to a stop every civil proceeding involving the debtor during the period of his bankruptcy. So, by law, a mortgage lender has to suspend all legal actions including a foreclosure action. However, a mortgage lender can file for relief from the automatic stay, and when the relief is granted, simply proceed with the aforementioned action. In short, bankruptcy will not allow a debtor to retain a house without paying his debt to the mortgage lender, and it will not halt the foreclosure process. Going into bankruptcy does not solve the problem; it only makes the process proceed more slowly.
While bankruptcy doesn’t stop foreclosure, it gives a person time to repay or at least makes it easy to repay a mortgage lender. The debtor has some time in which to come up with the needed funds, because the lender must suspend foreclosure when the debtor has filed for bankruptcy. In addition, because bankruptcy may get rid of certain unsecured debts, the debtor might be able to free up funds that he can use to make mortgage payments.
If you’ve looked at all other options, don’t just give up your home. Consider filing bankruptcy and give yourself a chance to pay back your debts – on your time schedule. A Chapter 13 bankruptcy is a court ordered payment plan and allows a debtor to pay the mortgage catch up amount over a period of time.
Unfortunately, not everyone qualifies for bankruptcy and if they do qualify, there are legal fees to pay. The amount of money you need to get your mortgage payment current may be nothing compared to the legal fees you will have to pay. If you are considering that declaring bankruptcy may benefit your situation and help you get out of a foreclosure, see a lawyer. A good bankruptcy lawyer should be able to answer your questions. Bankruptcy is so detailed that you should not try to handle it by yourself.
|
|