Most adults in Mississippi understand what it is like to encounter financial challenges. It is sometimes possible to find a swift solution to a financial crisis, such as temporarily taking a second job to generate additional cash flow or finding ways to cut spending. At other times, even the most innovative solutions do not seem enough to resolve the problem, which is a perfect time to consider bankruptcy protection as an option.
Especially if a person is worried that foreclosure proceedings may be imminent, filing for bankruptcy may prove to be a valuable financial tool that helps avoid it or stop it, if it is already in progress. There are several types of bankruptcy, and each program carries its own eligibility requirements. It is best to explore all options ahead of time to determine which type is the best fit for a specific set of circumstances.
Income must exist to pay back mortgage debt
A main difference between foreclosure and personal bankruptcy is that the homeowner can activate the bankruptcy process, while it is the lender that initiates foreclosure proceedings. Most lenders would rather avoid this because it is costly and time-consuming, with a lot of paperwork involved. It is a good idea for a homeowner to immediately contact a lender if foreclosure is a concern. If there is evidence of reliable income to pay back a debt, the lender might agree to a restructured payment plan instead of seeking to foreclose on the property.
If a person files for Chapter 13 or Chapter 7 bankruptcy, the court issues an automatic stay, which means that any foreclosure proceedings that have begun must cease pending the further order of the court. It also means that creditors can no longer attempt to contact to collect a debt until the bankruptcy claim is finalized. A Mississippi homeowner with questions about bankruptcy may seek answers by scheduling a consultation with a bankruptcy law attorney.