how can I stop a foreclosure?
Once you fall behind on your mortgage payments and your bank starts foreclosure proceedings it can be very difficult to stop them. To stop a foreclosure you will have to catch up on all your missed payments, as well as late fees and interest. If you don’t have the money to do that, then bankruptcy can help.
There is a common misconception that bankruptcy means losing all of your assets, including your home. However, a Chapter 13 bankruptcy allows you to keep your home and all your assets while stopping the foreclosure. Filing for bankruptcy triggers an “automatic stay”, which immediately stops the foreclosure action and prohibits your creditors from attempting to collect their debts during the bankruptcy. This automatic stay buys you time to determine if you can (and if you want to) save your home from foreclosure.
If you want to save your home from foreclosure a Chapter 13 bankruptcy allows you to pay back your mortgage arrears in reasonable installments over a 3 to 5 year period with no interest. You can also apply for a loan modification while in bankruptcy to try to lower your interest rate or even your principal balance, which will lower your monthly mortgage payments going forward.
If you have a second mortgage or line of credit on your home and the house is currently worth less than what’s owed on your first mortgage then a Chapter 13 bankruptcy can help you to strip off your second mortgage (meaning you no longer have to pay it). It will also wipe out any additional unsecured debt that you have.
If you are facing foreclosure and want to save your home, or at least buy some time to live in your home for free while saving money and looking for a new home, then bankruptcy may be the answer. However, it is important to meet with a bankruptcy lawyer to review your options. Contact us today for a free consultation with an experienced bankruptcy attorney.