How Bankruptcy Halts Foreclosure Proceedings
Foreclosure and Bankruptcy are frightening terms. With home foreclosures on the rise across the country, what can you, as a consumer do to protect your home? Financial disasters can happen at any time to anyone. While nobody wants to file bankruptcy, bankruptcy can stop foreclosure on your home.
In 2007, the U.S. Foreclosure Market Report showed 1 in every 555 households in the US filed for home foreclosure in October 2007. This is up 94% from October 2006. This is a frightening statistic, and can cause you to wonder if bankruptcy is right for you, consulting an experienced bankruptcy attorney to evaluate your unique situation.
Under both Chapter 7 and Chapter 13 bankruptcy, you are entitled to an automatic stay – or stop – foreclosure proceedings. Automatic stays stop all creditor proceedings and give you a break from the financial stress. These stays are temporary and vary in length, but provide you the relief you need to make your fresh start.
With Chapter 7, foreclosure stays are based on the equity of your home. If the equity is such that it falls in certain parameters, and you can continue to make your regular payments while discharging the rest of your debt, you may be able to keep your home. However, this is still a temporary measure and events may occur that still allows the lender to foreclose.
Chapter 13 provides for “wage earner” repayment plans and may save the home from foreclosure if the payment plan set up through the bankruptcy filing is followed. Automatic stays under Chapter 13 remain in effect for the life of the repayment plan which can be as much as 3 – 5 years.
If you would like to keep your home and there doesn’t seem to be any other options, bankruptcy might be your best choice. Fill out the free evaluation form and you can have your financial situation evaluated today by a professional bankruptcy lawyer.