Can Bankruptcy Stop or Delay a Foreclosure?

By |2017-09-23T21:45:03+00:00April 27th, 2017|Bankruptcy|

In the face of foreclosure, you may feel like you have few options. However, bankruptcy is a solution that can sometimes stop or delay an impending foreclosure. An experienced bankruptcy attorney can help you evaluate the details of your circumstances and provide information on solutions that you may not have considered. If you have missed mortgage payments and are facing foreclosure, it is important to consult with legal experts as early as possible in the process. Brent George Law offers considerable experience in foreclosure and bankruptcy.

The Foreclosure Process

The foreclosure process usually begins when you get behind paying your mortgage. The formal process does not start until you have missed three or more payments. Your lender will start sending you notices of your delinquency. Before formal foreclosure proceedings, you may have the opportunity to negotiate a short sale, loan forbearance, new loan terms, or another arrangement with your lender. If you are unable to resolve the delinquency, your lender will eventually notify you of legal foreclosure proceedings and the lender’s intent to recover the loan by selling your home, typically through auction. You will be asked to vacate your home by some time, usually in three or four months.

The Foreclosure Stay or Delay

If you file bankruptcy, the court will order an automatic stay on all debt collection activity by your creditors, including your mortgage lender. Depending on where you might be in the foreclosure process, your foreclosure can be delayed for several months or stopped. During this delay, you have more time to stay in your home and work out a financial plan. It is important that you use an experienced bankruptcy attorney to ensure that your legal paperwork is filed appropriately.

The Bankruptcy Process

Filing bankruptcy can be like hitting a reset button toward a fresh start and long-term credit recovery, though it may negatively affect your credit score for some time. There are two types of bankruptcy, Chapter 7 and Chapter 13, and an attorney can help you determine which is appropriate for your situation. In either case, a plan for managing your debt will be established involving a repayment plan and debt reduction or discharge. What happens to your house will be decided in this process, and your ability to keep it will depend on your income and other assets.

A consultation with an experienced bankruptcy attorney is a first step in successfully navigating a challenging foreclosure or bankruptcy situation. Brent George Law has helped numerous clients in diverse situations and offers free consultations. Even though it is challenging to face foreclosure or bankruptcy, you do not need to handle it alone.