Know The Truth: Can Bankruptcy Stop A Foreclosure?

Know The Truth: Can Bankruptcy Stop A Foreclosure?


know-the-truth-can-bankruptcy-stop-a-foreclosureYou may be experiencing some pressure when it comes to the bills you need to pay. Living expenses are on the rise, and if you’re constantly putting all of your income towards paying the bills and supporting your family, there may not be any left for other personal wants or needs.

You may not be surprised when one day you find yourself opening mail that reads: “Notice of Default”. Right away, you know that this letter is a result of trouble paying your mortgages, and now your lender is planning a foreclosed sale on your home.

In times like this, you should know that there are many ways for homeowners to know how to stop a foreclosure, so make sure you know your options. It may come to your attention that filing for bankruptcy might be an option…but can bankruptcy stop a foreclosure?

The real question now is: “How can bankruptcy stop a foreclosure?” There are 2 types of bankruptcies available for people in this situation:

Chapter 7 Bankruptcy – In Chapter 7 of the federal Bankruptcy Code, most or all of your debts will be cancelled while your other properties may be liquidated to cover up the outstanding and/or missed payments you have had with your creditors.

Filing for Chapter 7 Bankruptcy can delay the foreclosure by many months, but it is only temporary.  It works by allowing you to be free from most of your debts, if not all, preventing your creditors from continuing the collection of unpaid debts from you.  This includes your current home mortgage loan.

What will happen here is that the trustee will sell your other “liquid properties” (i.e. car, vacation homes, etc.) just to pay for the remaining debts with your creditors.

The process for this type of bankruptcy will take about four to six months and cost will be $335 for filing and other fees. Click here to learn more.

Chapter 13 Bankruptcy – Chapter 13 Bankruptcy works by allowing you to get hold of your creditors to give you some kind of a repayment or restructuring plan. This will give you at least 5 years to make your missed mortgage debts current.

Filing of Chapter 13 Bankruptcy may be an effective way of preventing foreclosure, as this allows you ample time to pay your outstanding balances over time, thus either delaying or preventing home foreclosures.

You can learn more about Chapter 13 Bankruptcy by clicking here.

bankruptcyConsider these two types of bankruptcy claims to help you prevent home foreclosure. You may visit our Blog section for more helpful options.

We here at CPD Homes want to arm you with the knowledge to make the best decision possible for you. We are happy to assist you, to help you to save time, money, and stress. Give us a call today and let us help you avoid foreclosure.

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