Three Things You Should Know About How Bankruptcy Relates To A Foreclosure
Posted on: 29 December 2018
If you have fallen behind in your mortgage payments and believe your home will be going into foreclosure or it is already in foreclosure, you may think that a bankruptcy is your salvation. But people have misconceptions regarding what a bankruptcy can do in a foreclosure. The following are a few things you should know.
It will stop the foreclosure
Although most people understand this, what is not as well known is that the halt to a foreclosure is only temporary. Only under rare circumstances will this be anything other than a temporary period until your bankruptcy filing can be processed, and your case heard before a judge. This time out, however, can give you some breathing room and give you a chance to decide where you will move to. You will not be evicted unexpectedly. Sometimes a lender can file a motion with the bankruptcy courts to allow for the sale to continue, but this is not common. Lenders usually have enough foreclosures to address and do not have the inclination to deal with one in bankruptcy.
A Chapter 7 bankruptcy can protect you from debt related to the foreclosure
There are many debts that you can accumulate from the foreclosure process. The cost related to the sale of the property is something you can be billed for. You can be billed for the cost of any cleaning and restoration the lender claims needed to be done. This is why bankruptcy is preferable to simply walking away from your home and your mortgage. If you qualify for a Chapter 7 bankruptcy, it can give you a fresh start and eliminate all future financial obligations relating to your foreclosure.
A Chapter 13 bankruptcy may save your home
Because a chapter 13 bankruptcy reorganizes your debt, it may be possible to include late fees on your mortgage and even payments that are overdue. There are two factors that you need to keep in mind. Your home should not be in foreclosure. You may see it one the horizon, but you haven't received a notice of foreclosure. The other important element is that you have the wherewithal to make your monthly mortgage payments. You are still paying all of the money that is past due, but you will be paying a little each month. This situation is one in which bankruptcy can save your home.
Bankruptcy as it relates to foreclosure can be complex. You always need to speak to an attorney to understand what options you have given your specific financial circumstances. The best time to speak to an attorney is before your home goes into foreclosure, but if you've already been notified, a bankruptcy attorney can help to mitigate the effect of the foreclosure. Contact an attorney, like C. Taylor Crockett, P.C., for more help.
Share