Nothing stings more than observing the local sheriff posting foreclosure notices on your beloved home, or knowing that the car repo guy is lurking around the corner. When this happens, it’s time to make a beeline to a knowledgeable bankruptcy attorney for protection.
How can bankruptcy offer protection?
An experienced attorney can quickly halt the foreclosure process by filing bankruptcy on your behalf. Of course, all efforts should be made to avoid filing for the big “B,” and there are many methods of keeping debt under control.
However, in the event that there just isn’t enough income to cover everything, and you are about to lose your home, bankruptcy can provide a path to keeping the roof over your head. Even if the foreclosure is in an advanced stage, this filing can usually bring things to a screeching halt.
What do the experts say about bankruptcy protection?
Information offered at totalbankruptcy.com explains, “Chapter 13 Bankruptcy laws are designed to stop foreclosure.” This is an important bit of information to be armed with if someone is about to lose their home.
The site continues, “Personal bankruptcy can be a powerful mechanism to possibly save your home if you want to stop foreclosure and may provide you with the protection and relief you need to stay in your home and catch up on your past-due debts.”
What type of bankruptcy is involved?
When facing foreclosure, Chapter 13 bankruptcy is often filed to stop the process because an automatic stay usually can prevent foreclosure, at least temporarily.
Because a Chapter 13 filing is a request to reorganize debt, it enables a debtor to set up a payment plan to creditors through the court system over a period of several years. It often allows someone who has a steady income to keep their possessions, rather than lose everything.
What happens after filing?
On one hand, a solid bankruptcy attorney may be able to negotiate some of the debts to a lower amount. On the other hand, there are often tremendous legal fees tacked on by the mortgage company to cover the foreclosure costs.
After all of the debts are combined, the attorney calculates a payment plan and presents it to the bankruptcy judge. Once this plan is approved, as long as the debtor makes the designated payments, all assets remain in the debtor’s possession.
A True Story
“It was sickening to see the foreclosure notices on my house,” explains a homeowner in Pennsylvania. She said she immediately contacted a well-known local bankruptcy attorney, who promptly filed for an automatic stay, which is entered when a Chapter 13 is initiated.
“It took five years, and it was a struggle at times, but we were discharged by the court over a year ago because we paid it off.” She emphasized how relieved she was to know that her children were not forced out of their home. “I hated to file for bankruptcy, but if I didn’t, we would have lost the house for sure.”