The bankruptcy process has many features that can greatly benefit those in financial hardship. When debts become unmanageable, many people have successfully resolved their debts through bankruptcy. In fact, one of the most sought after benefits of bankruptcy is its ability to stop or prevent a foreclosure on a home. While filing for bankruptcy can help fight against foreclosure, it isn’t always the best strategy for everyone.
Knowing When It’s Right
The best place to start when considering whether bankruptcy is right to help you fight a foreclosure is taking a look at your mortgage debts. Have you missed payments? Did your lender give you a foreclosure notice already? Has the foreclosure process already been started? and, more importantly, Have you tried other options for resolving your mortgage debts outside of bankruptcy?
These questions are important for many reasons. First, if you haven’t missed a payment your house is probably not under a current threat of foreclosure. Further, you may not be eligible to qualify for bankruptcy if you are still financially able to make your payments.
Second, if your home is currently in the foreclosure process you need to consider how the process is handled in your state. Non-judicial foreclosure states do not require court orders or interaction to proceed with a foreclosure. This means that the process can happen very quickly and you may not have enough time to stop the foreclosure, even with the help of bankruptcy. Timing is everything in non-judicial foreclosure states.
Last, there are other ways to resolve mortgage debts and defend against a foreclosure other than bankruptcy. In many cases, lenders may be willing to halt a foreclosure to negotiate with you directly. Bankruptcy should be a last resort option that is reserved only if you cannot afford to resolve their debts in any other manner.