Using Bankruptcy to Stop a Foreclosure

The automatic stay provision allows customers to file for bankruptcy during the creditors collections process. This will put a stop on all contracts and collections from the creditor. A debtor can receive credit counseling from a non-profit credit counseling agency prior to 180 days to filing chapter 7 or 13.

Talk to a Bankruptcy Lawyer for Help

If your home is about to be foreclosed on, contact a lawyer and find out what your rights and options are. Your creditors will respond to an automatic stay, but you will have to file for bankruptcy before the home foreclosure process has begun. To stop your home from being foreclosed upon, you may file and catch up on a past due mortgage.

Special Forbearance

Special forbearance is when a lender arranges a re-payment plan based on your financial situations or possibly according to your income. During this process you will be required to submit income information.

Loan Modification

Mortgage modification is another way you may refinance debt you can use this by extending the term of your mortgage loan and catch up any monthly payments.

Pre-foreclosure Sale

Pre-foreclosure sale is where you have the option of selling your property for less than you owe, this is if the lender agrees, and if the buyer meets all the lenders current guidelines.

Deed in Lieu

Deed in Lieu is in which foreclosure should be used as a last resort. Send your property back to the lender. This process does not save your home, but it will not be as harmful to your credit.

Using Chapter 13 to Stop Foreclosure

Many customers do not know that filing a chapter 13 can stop the foreclosure of your home. Also, if you have a co-signer, creditors can go after them as well, but this depends on the terms of your debt agreement. If you have filed a chapter 7, the creditors have the right to demand payment from your co-signer.

Your Ability to Repay Debt

If you have a large amount of debt that can not be paid and you have filed a straight chapter 7, you are not required to repay your debt. If you file a chapter 13, there will be a process where they will determine your future, take-home income and you will be set up on monthly payments that are reduced. All types of your income will be considered, income such as, social security, child support, spousal support, unemployment, workman’s comp, disability, and retirement, so long as they constitute as regular income.

Creditors can repossess property to take back goods that the debtor failed to meet in the payments. There are two types of loans available for protection of property. The two loans are as follows:

I. A secured loan - This loan requires you to put up some sort of collateral. One type of collateral is a car. If for any reason you fall behind on your payments, contact your creditor as soon as possible to try and set up some sort of payment plan to resolve the issue.

II. An unsecured loan - This type of loan is where you use a credit card. Like with a secure loan, if you fall behind contact your creditor as quick as possible.

Bankruptcy can stop your debt. This may give them the opportunity to stop the repossession. However, if you are thinking of filing bankruptcy, be sure that is the path you want to take. Bankruptcy can affect your credit for up to ten years. Filing bankruptcy may be the only choice you have left. Before doing so, contact a financial adviser and see if there may be any unknown options you were not aware of before committing to filing any bankruptcy claims.

No homeowner wants their home to be put into the foreclosure process. Filing a chapter 7 or 13 may or may not help your situation. It is best to get all the information you can before taking the next step. Do not get yourself into a more serious financial bind then you might already be in. Consult specialists before making a move.