Bankruptcy Explained: Stopping Foreclosure Through Bankruptcy or Loan Modifications
Posted on Friday, March 13th, 2015 at 12:15 pm
If you are struggling financially and have not been able to keep up with your mortgage payments, a personal bankruptcy filing under Chapter 7 or Chapter 13 can suspend foreclosure actions and help you get a fresh financial start. There are also ways that you can avoid foreclosure without filing for bankruptcy. You want an experienced attorney to help you understand your options, so that you can make decisions that are in your best interests. Simply allowing your home to be foreclosed upon without understanding your options can lead to serious consequences that follow you for years.
Questions to consider if you have received a foreclosure notice…
- Have the foreclosure papers been properly filed by the mortgage company?
- Is the current mortgage company the original mortgage company? If not, do they have the legal right to pursue foreclosure?
- Has the current mortgage company padded the fees they are charging you?
Stopping Foreclosure Through Bankruptcy
Often, the fastest and most effective way to suspend foreclosure actions and save your home is through a Chapter 13 bankruptcy filing. When you file for bankruptcy, an automatic stay goes into effect, prohibiting your creditors from calling, writing or pursuing any legal action (outside of the bankruptcy) to collect on debt. Mortgage debt can either be discharged in a bankruptcy, if the property is going to be surrendered, or the debt can survive bankruptcy if you are attempting to retain the property. Chapter 13 can provide you with a structured way to catch up the mortgage arrearage in an interest and penalty free environment. If you want to delay a foreclosure to allow you to find alternate living arrangements, a Chapter 7 bankruptcy may be your best option.
If you file Chapter 7 bankruptcy, your debt relief normally includes…
- Credit card debt relief
- Medical bill debt relief
- Collection calls must stop
- Your assets are normally left intact allowing you to repay the debt (i.e., home, vehicles), and possibly reduce your payments, and/or interest owed.
If you file Chapter 13 bankruptcy, your debt relief normally includes…
- Reorganization of credit card debt to possibly reduce interest, and extend the time to repay
- Collection calls must stop
- Your assets are normally left intact allowing you reduce your monthly payments, and possibly reduce interest.
- All debts are repaid and lenders value your desire to repay them.
Stopping Foreclosure Through Loan Modification
Another option that will allow you to keep your home is the modification of the terms of your mortgage. Loan modification is not a cure-all, however. Unfortunately, we know of too many stories of people who tried to handle a loan modification effort on their own, only to have foreclosure proceedings filed against them when they thought a modification was in the works. Regardless of your situation, if you think foreclosure proceedings are imminent, you need to contact us.
Regardless of where you are in the foreclosure process, time is always of the essence. Your best chance to stop a creditor from taking your home is to contact Lawrence & Associates right away. We are always prepared to take swift legal action in order to stop a foreclosure and protect our clients.
Our Bankruptcy Explained Series
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Lawrence & Associates Provides You With Debt Relief Solutions Through Bankruptcy
- Chapter 7 Bankruptcy
- Chapter 13 Bankruptcy
- Creditor Harassment
- Property Exemptions
At Lawrence & Associates, we help our clients understand how bankruptcy laws are made to protect them and will allow for a brighter financial future.
Contact Us (859.371.5997) for a Free Consultation