Lenders are only authorized to initiate foreclosure proceedings if homeowners has defaulted on their mortgage payment for a set period. After multiple payment are missed, a lender initial foreclosure and must inform the homeowner if the new development. The home will not be sold immediately as foreclosure proceedings usually takes time, that period could be maximized by homeowners to try out alternatives to stop foreclosure and save their home. Filing for bankruptcy is one of the many options available to homeowners to stop a foreclosure and offer relief for some time.
How does it work?
An automatic stay order is given by the court and it immediately goes into effect by stopping all creditors collection activities which includes a foreclosure. Even when a foreclosure sale date has been set to auction your home, filing for bankruptcy will postpone it for about 3 – 4 months. The time given can be used to explore other options or re-strategize on how to save your home.
What chapter should I file for?
Depending on you current financial situation and whether you want to keep your home or not. Chapter 7 bankruptcy offers temporary relief to homeowners, it is effective when it comes to stopping a foreclosure but most of your properties usually including your home will be sold to pay off your debt. Therefore, you must carefully consider your options before filing for chapter 7 bankruptcy.
Chapter 13 bankruptcy on the other hand provides a longer relief which can span to about 5 years. For homeowners who want to stop foreclosure but also keep their home, filing for chapter 13 bankruptcy is the perfect option. As long as you keep paying regularly on your repayment plan which has been modified, you get to enjoy the comfort of your home much longer.
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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