When you hear from your mortgage lender regarding foreclosure, it means you have missed a number of payments. The mortgage lender will usually try to contact you at the beginning to give you options to get current on those payments, but if you can’t do so, then they may move toward foreclosure proceedings.
Naturally, you may be looking for ways to stop this foreclosure and keep your home, especially if you have a family. Is bankruptcy an option that you should consider at this time?
Providing temporary relief
Filing for bankruptcy does have some significant benefits when facing foreclosure, starting with the implementation of an automatic stay. This is a court order that puts other court cases and financial actions on hold. Your lender can’t foreclose until your bankruptcy case has been completed. Bankruptcy can take a few months, so putting the foreclosure on hold via the automatic stay at least gives you more time to stay in the house.
Ideally, bankruptcy can also help you stop the foreclosure entirely. Maybe you were just missing mortgage payments because you had a significant amount of outstanding debt. If you use Chapter 7 bankruptcy to eliminate that debt, however, your mortgage may be affordable again. If you use Chapter 13 bankruptcy to consolidate your debt into a repayment plan, that can also make the mortgage affordable. In this sense, bankruptcy can help you keep your home long-term.
It is important to understand exactly what legal options you have and what steps to take when facing these financial challenges—and it can help to work with an experienced law firm.
