What is Involved In Filing For Bankruptcy To Stop Foreclosure
Filing for bankruptcy under chapter thirteen is a method that is used by many homeowners to stop foreclosure.
This is the only form of bankruptcy that offers hope of allowing the mortgagee to remain in the home.
If you are trying to avoid losing your home to foreclosure by filing for bankruptcy, you need to file for chapter thirteen bankruptcy, not chapter seven.
Stop Foreclosure – Bankruptcy Reorganization
If you have a reasonable amount of debt that might be manageable, and if you are able to change the terms, then you might be able to file for a bankruptcy reorganization.
This reorganization type of bankruptcy is not for people who are drowning in so much debt that they will never be able to pay it off regardless of the terms.
When you file for reorganization under chapter thirteen, the foreclosure process on your home will be halted, at least temporarily.
This halting process can buy you some time to work out another plan for saving your home. For example, if you have a buyer but need more time for them to close.
However, keep in mind that even if your plan to stop foreclosure with bankruptcy reorganization succeeds, you are going to end up with a bankruptcy filing on your credit report in addition to the foreclosure action that is already being reported.
Having your credit report scarred by not just a foreclosure but a bankruptcy as well makes you look very questionable to potential lenders.
Stop Foreclosure: When To Reconsider Bankruptcy Reorganization
For that reason, you should think twice about filing for bankruptcy if you believe you are going to be trying to buy another home within the next few years – 5-7 years.
Although the credit slaps can be severe, many people go ahead and opt for chapter thirteen bankruptcy in an attempt to save their homes.
In fact, bankruptcy reorganization is often the only realistic option available to you at that moment to prevent foreclosure of a home.
Under bankruptcy reorganization, you and your attorney or legal adviser will come up with a plan to pay off your debts. A federal bankruptcy judge will then have to approve your plan.
Stop Foreclosure – Be Realistic With Repayment Plan Offers
During bankruptcy reorganization, be realistic about a repayment amount and careful not to agree to a repayment plan that will be extremely difficult or impossible for you to stick to.
If you are one (1) day late on any trustee payments your case “may” be dismissed, the stay will be lifted and you will be back in Foreclosure. This is why it is important to be realistic about repayment plans.
Think of this as your last chance to save your home. If you fall behind on your payments again after you have gone through a chapter thirteen bankruptcy, you will probably notl be able to save your home.
If you file for bankruptcy reorganization under chapter thirteen, there is a chance that you still may not be able to work out a payment plan with your creditors.
There is no guarantee going into bankruptcy reorganization what the outcome will be. However, a good bankruptcy attorney will be able to help you determine whether a chapter thirteen bankruptcy is likely to be in your best interest.
Not everyone will benefit from bankruptcy reorganization, but depending on your circumstances it could be your best option for stopping foreclosure on your home.
Be sure to do your homework first though because there are pros and cons to filing for chapter thirteen bankruptcy. Only you can decide whether the pros outweigh the cons.
No person in the world needs to lose their house. This is why there are so many folks looking for a way to Stop Foreclosure.
For those industrious souls interested in investigating alternative income streams to help create a side income, you can get started with this home internet business idea. It won’t stop foreclosure, but it will help you to think about alternative income ideas in this tough economy.
If you are one of those people who hope to stop foreclosure, you may want to look for Foreclosure Help.
|The Foreclosure Survival Guide: Keep Your House or Walk Away With Money in Your Pocket|