After falling behind on mortgage payments – approximately four months’ worth by most lenders’ standards – foreclosure becomes a real possibility. Banks will often not hesitate to try to foreclose on your home. If you want some breathing room and time to think about how to prevent foreclosure and the loss of your home, then you have to be the one to take action.
In order to try to hold onto your property, filing for Chapter 13 bankruptcy might be the best legal tool to use. Just mentioning bankruptcy can put shivers down your spine, but do not worry too much. When done correctly, it can be extremely beneficial.
Two benefits to Chapter 13 bankruptcy that can save your home are:
- Automatic stay: Whenever someone files for bankruptcy, the bankruptcy court will order an automatic stay on all of the filer’s accounts. Put into basic terms, the automatic stay prevents creditors and lenders to take further action against the filer until further notice, i.e. the conclusion of their bankruptcy. If the foreclosure process has begun on your home, the automatic stay will pause it.
- Restructuring your debt: Secondly, Chapter 13 bankruptcy minimizes your debts and restructures what is left after the reduction into a friendlier repayment plan. This can give you the power to more-easily take control of your finances without sacrificing too much of your personal property, as you might in Chapter 7 bankruptcy. In terms of fighting foreclosure, reorganizing your mortgage could be exactly what you need.
Although, before you spring at the chance to file for Chapter 13 bankruptcy, there are possible alternatives to bankruptcy to consider. Nothing guarantees absolutely the prevention of foreclosure, so it is worth taking the time to explore all your options. It could be possible to get a loan modification without filing at all.
Legal Knowledge & Insight You Can Depend On
At the Law Offices of Marshall D. Schultz, our Detroit bankruptcy attorneys would be happy to discuss your options to fight foreclosure. Our priorities are determining if bankruptcy is right for you, and taking the appropriate steps if it is. Call 888.822.6730 to speak with a legal team who has more than 25 years of collective bankruptcy law experience and more than 10,000 total cases handled for consumer debtor clients. Schedule your free consultation now.