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Will Filing Bankruptcy Stop Foreclosure?
Some individuals ponder the decision to file bankruptcy or simply allow the mortgage lender to start foreclosure. It can't be presumed to be a simple case of either/or as a verdict is not possible and cannot be made this easily. If you don't pay your mortgage, the lender can initiate foreclosure proceedings. The single method of stopping this from happening is to make the payment to the mortgage lender. A mortgage loan is sort of like a car loan and if a person does not pay his car payment, he will lose the car through repossession. The rule is same for all and is applicable to any person not paying his mortgage payments - they will have to forgo the residence through foreclosure.
A legal action filed by somebody who is unable to pay his debts is called as bankruptcy. If the debtor is in bankruptcy then all the civil proceedings to collect debts are stopped. A mortgage lender must stop all legal actions, including foreclosure proceedings. The mortgage lender can apply for relief from the automatic stay. When it is granted, then the lender can proceed with the foreclosure. Declaring bankruptcy will not halt foreclosure and you still must repay your loan. Bankruptcy may make your financial problems easier to handle, but it will not make them completely go away.
While bankruptcy doesn't mean you don't have to pay your mortgage, it gives a person time to repay or at least makes it easier 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.
About the Author Stop foreclosure on your home, find out the steps of foreclosure, so you can be more informed. Get information about bankruptcy, stopping foreclosure, refinancing, buying and selling homes, different mortgage types and other real estate information at Real Estate - Get In The Know.
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