Foreclosure is what happens when a homeowner falls behind and fails to pay the mortgage. It is a legal action where the owner loses all rights to their property and home if they cannot pay the outstanding debt. A foreclosure is basically an auction of your home on the courthouse steps. A sale date is set and if the sale is not stopped, then someone will bid on your house and become the new owner of the property. Filing for bankruptcy puts an automatic stay on all foreclosure proceedings. By contacting our bankruptcy attorneys, you can potentially save your home but the bankruptcy case must be filed before the foreclosure sale happens.
Many people have success keeping their homes by filing for Chapter 13 bankruptcy. If you file before the foreclosure sale, we can use your repayment plan as a tool to help you catch up on your delinquent payments. The biggest benefit to filing a chapter 13 is that you will not have to make a lump sum payment to catch up your mortgage. In chapter 13 you are allowed to catch up the mortgage payments over time. As long as you are able to pay your bankruptcy payment plan you would be allowed to keep your home. At the end of the bankruptcy case, you will be up to date on your bankruptcy payments.
If you are unable to afford to keep your home, or if you cannot catch up on your backlog of mortgage payments, filing for Chapter 7 bankruptcy will allow you the time to find another place to live instead of being turned out on the street. It will also allow you to walk away from your mortgage and payments in arrears without fear of the bank coming after you to collect for the money owed.