A home is usually the most expensive purchase a person will make in their lifetime, which is one reason the threat of losing it is so stressful and challenging. And to make matters worse, when people get behind on mortgage and tax payments the humiliation can cause them to hide the problem instead of getting the expert council needed. Foreclosure protection to save your home requires experience and strategic legal action.
A mortgage is backed by the secured asset of your home, which the bank owns title to until you pay off the note. While it’s commonly believed that filing personal bankruptcy can stop a mortgage company from foreclosing on a home, this is not entirely correct; it depends on the bankruptcy filing type and your anticipated ability to pay the mortgage after protection expires.
When you file Chapter 7 bankruptcy, a temporary court-ordered injunction or ‘automatic stay’ blocks the bank from foreclosing. This can be done at the last minute – even up to the day before a foreclosure sale. While it stops the foreclosure proceeding, the lender can still file a motion to allow them to proceed with foreclosure. How long it takes to rule on the motion depends on the backlog of foreclosures in your area and the resources of the lender.
When a homeowner is behind on mortgage payments, the bank will demand a lump-sum payment including penalties and fees to bring the mortgage current. Filing Chapter 13 provides delinquent homeowners an easier way to get caught up on mortgage payments, allowing smaller payments to be made over a three to five-year period with an automatic stay that prevents foreclosure for the length of the payment plan – as long payments are made. Chapter 13 can create a payment plan with foreclosure protection that provides a clear way out of debt.
If you’re behind on your mortgage payments and have received foreclosure notices, it’s important to seek experienced legal advice right away. Curtis, Casteel & Palmer, PLLC Bankruptcy Law can advise whether Chapter 7 or Chapter 13 is the right bankruptcy alternative for you. Call today to avoid foreclosure and get a fresh start!
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