How Bankruptcy Can Stop Foreclosure Proceedings

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A bankruptcy filing can immediately
stop foreclosure in most cases when proceedings have yet to be finalized. Bankruptcy may
help homeowners buy more time in determining their next move including
whether or not they want to keep their home. This is also a good time
for debtors to review with their bankruptcy attorney about their options
and their rights regarding redeeming the property (your home).

Some debtors wait until a foreclosure sale is imminent before they consider
bankruptcy. In some cases if the sale has occurred the debtor may have the right
to redeem the property by making payments overtime that includes current
and past due payments. Keep in mind, doing this may not allow the debtor
to catch up on payments and they may have to pay the full amount of what
the purchaser paid including interest at the foreclosure sale. This can
be an option for homeowners if they can afford it.

When bankruptcy is filed the
automatic stay goes into effect which is a legal injunction from the court. It stops
actions related to foreclosure even if the creditor is unaware the debtor
filed. In some cases a foreclosure can be undone by the bankruptcy trustee
if fraud was committed on behalf of the creditor. Foreclosure can be a
complex situation to deal with the longer a debtor waits until they take
action. This is often why homeowners in default or have missed mortgage
payments should consider reviewing their situation with an experienced
bankruptcy attorney.

Reference:
http://www.txbankruptcyblog.com/

By | 2017-12-13T00:45:24+00:00 February 13th, 2014|Foreclosures|Comments Off on How Bankruptcy Can Stop Foreclosure Proceedings