There is no doubt that a foreclosure can be an upsetting thing for most people. But what you might not know is that you can delay a foreclosure with a Chapter 7 bankruptcy or even use a Chapter 13 bankruptcy to help you save your home as well.
Typically, when a person does a bankruptcy filing, the reason is that their payments have fallen too far behind and there is no clear way to catch things up. Since the foreclosure itself will not occur until you are a few months behind, other methods are typically in place before it reaches this point. However, when you have exhausted your other options, then you will need to work on what is called an automatic stay.
When you do your bankruptcy filing, the court issues an Order for Relief. With this, you have an automatic stay that will not allow your creditors to continue collection activity. If you are set to lose your home on auction, you are going to see that it will be postponed for several months. This can give you time to catch up on your payments or to pursue other living arrangements.
However, this can have a snag in it as well. For one, if your foreclosure has already been filed, this process will not work. Along with that is a motion to life the stay. With this, the lender can proceed with the sale of your home and you may need to move sooner than this period of time. Because of this, you are going to want to consult with your attorney when you are filing bankruptcy papers. They will be able to give you information on this process and what your options may be, depending where you are in the foreclosure process.
Your other option can help you to keep your home and could potentially save you some money as well. With this process, the foreclosure ceases and you are able to keep your home. The difference is that you will have your arrears turned into part of the repayment plan. That can help to save you some money and along with that, the foreclosure will then cease. If you have a second or even third mortgage, these items can potentially become unsecured debt and that could mean that you will not need to pay them back at all.
To begin this process, you are of course going to need to start by filing bankruptcy paperwork with your bankruptcy attorney. During that time, they will be able to sit down with you and explain all the different solutions you have and the process that you can go through to save your home. It is essential that you take your time in this process to understand these types of bankruptcy and fully understand what they mean for you. By doing that, you can ensure that you have few surprises in the process and that you take an approach that is going to be effective as well.