Can you stop foreclosure with chapter 7

When your mortgage and other obligations are more than you can afford, you can file for bankruptcy under Chapter 7. Except for a few particular categories such as child support and tax return fees, the bankruptcy court must cancel the debts. Some of your properties can be sold by the court first to pay your creditors. Chapter seven may clear your mortgage debt, but the lien or the title of the lender in your home can not be cleared. It means that the lender still has the right to shut down, but you can use bankruptcy to avoid that.

  1. Speak to a credit advisor. According to the Credit Information Centre website, federal law requires consultation at least six months before the filing of Chapter 7.
  2. File Chapter 7 with your Federal Insolvency Court and pay the filing fee. The form and directions can be downloaded from the US Courts website. You will prove that you can pass one of the income checks in Chapter 7, for instance. B. That your income is below the median and that your assets and debts are known. If you qualify for chapter 7, the court shall issue an automatic stop to prevent your creditors, including forfeiture sales, from taking legal action against you.

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  1. Continue to pay your mortgage if it is not in default already. If you are late on loan, pay late if possible. Chapter 7 can postpone forfeiture, but it will not remove the lien. If you do not keep up with your mortgage, after bankruptcy, your lender must close.
  2. Make a lifetime financial strategy following the bankruptcy. Chapter 7 sets out the clearing of medical debt, payments for credit cards, and any other loans, ensuring that you have more funds for your mortgage. This could mean the difference between your home loss and home retention.

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Your lender may ask the court to refuse to stay automatically and continue foreclosure. Nolo says most borrowers conclude that the effort isn’t worth it, but that it is possible.

For information on foreclosure defense call us at (877) 399 2995. We offer litigation document review support, mortgage audit reports, securitization audit reports, affidavit of expert witness notarized, and more.

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