Bankruptcy and foreclosure are terms that can not be grasped by the ordinary person. Bankruptcy can, however, become a tool that can help you keep your house in the face of foreclosure.
The Court shall issue an order for reparation without delay if you file for bankruptcy following Chapter 13 or Chapter 7. This order grants you a “free stay” in which your creditors can automatically stop receiving something. If your house is due to auction foreclosures, they will be postponed until the bankruptcy has been resolved. It usually takes between 3 and 4 months.
There are two exceptions to this purchasing time rule:
- When the lender submits a request for residence: the lender can, unfortunately, file a request for residence requesting permission from the bankruptcy court to continue the purchase of the foreclosure. If this is granted, you may not receive an additional three or four months.
- If the foreclosure has already been filed: most countries have laws requiring lenders to notify homeowners before their property is sold. The automated failure stay will NOT stop the clock on this advance notice.
You may set up a payment plan in Chapter 13, Bankruptcy, to cancel late payments or arrears. You can suggest a repayment term, but remember that you need enough money to simultaneously cover both the overdue and the new mortgage payments. As long as you make all the required payments for the payment agreement’s duration, you can escape bankruptcy and remain in your home.
Chapter 7 further cancels all domestic equity commitments, including mortgage loans and household equity. Chapter 7 is one more move. Chapter 7 also excludes the owner’s tax liability due to the default of the borrower in respect of losses sustained by the mortgage or the home improvement of the lender.
The loan is not a mortgage loan that is not used for maintenance (e.g., a holiday loan or a car). Mortgage or home equity loans are based on non-main property (e.g., vacation home or rental property).
If you’re facing a foreclosure and you’re concerned about your financial future, keep in mind that filing a bankruptcy will help you keep your home or minimize your hit. By finding a bankruptcy lawyer who knows the financial conditions and aims to make the process as straightforward as possible, you can find out more about the options. Find a professional bankruptcy lawyer today.
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