If you are in the situation where you are about to lose your house, you may have asked, can bankruptcy stop foreclosure. In most cases filing bankruptcy can stop foreclosure. But you have to follow all the procedures. Before considering bankruptcy are you sure you've exhausted all your other options?
First, are you sure your house is in foreclosure? Many people think that as soon as they miss a payment or two the sheriff is about to come and put them out on the street. This is not true. Understand that your lender does not want your house. They will work with you as much as they can in order for you to keep your house and continue making payments.
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If you've already gotten a notice of intent to foreclose, you need to get with an attorney to discuss your options. Filing Chapter 13 bankruptcy can stop foreclosure by creating a stay. A stay means that no collector can take any further action against you in regard to you owing a bill - including your mortgage. What the stay does is give you time to work out a repayment plan, that includes the mortgage arrears that you owe and present it to the state trustee and your secured creditors. Usually Chapter 13 allows you 3 to 5 years to repay your secured creditors and some unsecured creditors, depending on your financial situation.
Your Chapter 13 repayment plan may include other bills and back payments as well as your mortgage arrears. I will use an example of just your mortgage arrears. If you owe $6,000 in arrears and $3,000 in fees, your payment plan will stretch that $9,000 over 3 to 5 years. It is a lot easier to pay back $150 a month for 5 years than to try to pay back $6,000 over a couple of months. If your plan is accepted and your bankruptcy is confirmed, you start with a clean slate in your mortgage payments. If you still do not have the income to make your mortgage payments, your lender can ask to have the stay lifted and the foreclosure process will continue. Bankruptcy will not stop foreclosure if you do not have the income to start back making payments after the bankruptcy.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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