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Key Points You Should Know about Bankruptcy and Foreclosure

Posted By Allmand Law Firm, PLLC || 8-Aug-2013

Most people are aware that bankruptcy can help you keep your home, but what some may not know is that the process can help you do this in more ways than one. In most cases, it depends on your unique situation and which chapter is filed. Aside from preventing or avoiding foreclosure, you may be able to reduce your mortgage payment and cure default payments to bring your mortgage current. Whether you are facing foreclosure or feel it is a possibility in the future, there are a few points to review when it comes to facing the issue in bankruptcy.

  • The automatic stay can delay or stop foreclosure in either Chapter 7 or Chapter 13 bankruptcy. The automatic stay can give debtors more time to figure out a solution depending on which chapter is filed. Yet, the effect of the stay may vary depending on where you are in your situation.

  • Chapter 13 can restructure debt obligations to make it easier for you to repay them. Some consider this option when they were unable to reach a negotiation with their creditor. Chapter 13 helps homeowners pay arrearages overtime on their mortgage so they can keep their home. You need to be able to make current mortgage payments as well with this plan. This plan can help you eliminate second and third mortgages by discharging them as an unsecured debt.

  • Chapter 7 filers may get more time to stay in their home if foreclosure is imminent. Some debtors use this time to save money to place toward their missed mortgage payments or toward moving to a new place. Certain debts attached to the home may be canceled (such as a home equity loan or additional mortgages). Some debtors may qualify to have certain property tax liabilities be eliminated.

Categories: Foreclosures
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