Can You Stop Foreclosure by Filing for Bankruptcy?
You fear a foreclosure and wonder if there is anything in the world to stop it? Luckily, bankruptcy can stop a foreclosure on a home. That means when you initiate a bankruptcy case, all creditors are legally prevented from any collection activities against you. Sadly, there is a taboo associated with bankruptcy that prevents many people from filing one. In fact, bankruptcy for foreclosure is a safe alternative for those who are genuinely making efforts to pay their mortgage but shortage of income is preventing them from keeping their promise.
How to File for Bankruptcy to Stop Foreclosure
You can file for bankruptcy by consulting with a professional debt settlement attorney. A qualified bankruptcy lawyer can help you determine whether it is a safe option for you. They will not hesitate to make you aware about the ramifications of bankruptcy. A professional bankruptcy attorney will advise you on the best option to file under and file all paperwork. Experienced debt settlement lawyers work hard to get the best results for clients.
It begins with filing the bankruptcy petition along with necessary paperwork and financial documents. If you fail to complete your petition correctly, it may delay your bankruptcy proceedings. In the worst case scenario, delay could amount to the rejection of your petition. When you work with a bankruptcy attorney, you can avoid such problems and complete the petition. After the court has accepted your petition, the bankruptcy trustee is responsible for notifying your mortgage lender and creditors. Hereafter, there is an automatic stay on all collection efforts.
But remember that since mortgage is a secured loan, there could be a halt on foreclosure for a specific period of time. However, this allows debtors to arrange your finances and negotiate an alternative route with the lender. The foreclosure will begin again after the bankruptcy process is complete.
Chapter 7 and Foreclosure
Under Chapter 7, a debtor may discharge other debt so you can afford to pay the mortgage. As a result, the lender may permanently stop the foreclosure. It is in your best interest to sell your home than a foreclosure if there is equity in it so you can pay off other lenders.
Also known as reorganization bankruptcy, Chapter 13 allows a debtor to reorganize their finances and negotiate new payment terms with lenders. This ensures that you can repay at least a part of your debt to everyone for the duration of the payment plan. Hereafter, remaining unsecured debts are dismissed, thus many debtors are able to afford their mortgage.
An experienced bankruptcy attorney is the best person to help a debtor negotiate the best terms. If you fear a foreclosure as you struggle with making timely loan payments, it is in your best interest to get in touch with a debt settlement attorney, who has experience working with foreclosure and bankruptcy and can give you the best advice to negotiate with your creditors. Schedule your consultation with the top lawyers in the bankruptcy law, who are available to guide you at every step of the procedure, from planning to negotiation and implementation.