Everything You Need To Know About Foreclosure Law

« Back to Home

A Guide To Shielding Your Home With Bankruptcy Filing

Posted on

Unexpected situations may throw your financial stability into disarray, leading to a possible foreclosure of your home. However, there are actions you can take. In fact, filing for bankruptcy might be the silver lining in your cloudy situation.

The Power of Bankruptcy to Halt Foreclosure

Bankruptcy carries a powerful mechanism that can safeguard your home from foreclosure. The second you file for bankruptcy, an automatic stay is put into place. This legal term means all debt collection efforts, inclusive of foreclosure procedures, must cease immediately. If your house is slated for a foreclosure sale, that event will be delayed as long as your bankruptcy proceedings are ongoing.

Understanding Chapter 7 and Chapter 13 Bankruptcy

There are two particular types of personal bankruptcy relating to a home foreclosure: Chapter 7 and Chapter 13.

If you opt for Chapter 7, you can discharge a large portion of your unsecured debts, leaving more of your earnings available to cover your house payments. However, Chapter 7 may not help if you're already too far behind on your mortgage payments.

Alternatively, Chapter 13 gives you the opportunity to clear your arrears over an extended period. But, to fend off foreclosure, you must keep up with both your regular monthly mortgage payments and your Chapter 13 plan payments.

The Importance of a Bankruptcy Lawyer

Treading the murky waters of bankruptcy law without professional guidance can be perilous. A specialized bankruptcy lawyer can make the journey smoother by explaining all your choices and the subsequent implications.

Your bankruptcy lawyer can evaluate your fiscal status, propose whether bankruptcy is an appropriate course of action, and, if it is, suggest which type of bankruptcy would be most beneficial. They will also complete the legal paperwork and speak on your behalf in court.

Ensure you can work well with your chosen lawyer because they will be your compass in this intricate and nerve-wracking process.

The Expense of Hiring a Bankruptcy Lawyer

While the financial commitment of hiring a lawyer might be daunting given your present circumstances, the advantages usually surpass the expenditure. Many lawyers provide a complimentary first consultation, and some even offer payment plans.

In closing, a looming foreclosure need not spell disaster. Bankruptcy, although a significant decision, could be the rescue rope you need to climb out of your predicament. And a knowledgeable bankruptcy lawyer can provide the direction and support you need in this tough journey. Schedule a consultation with a bankruptcy attorney to learn more.