Preventing a Foreclosure with Bankruptcy

: Chris Lee Law Firm

  Filed under: Foreclosures

ForeclosureLosing your home to foreclosure could have many adverse effects on you and your family. Once you have gone through a foreclosure, you may have trouble finding a new place to live or getting a loan in the future when your finances are more favorable to making house payments.

Foreclosures can also negatively impact neighborhoods bringing down the property values, putting those homeowners at risk of owing more on a home no longer able to hold it’s economic value. Abandoned properties are also a problem affecting communities.

Missing Payments

The foreclosure process generally begins when a homeowner misses three or more payments on the mortgage. Although foreclosures can begin with as little as one missed payment, the process varies by the state regarding the time it takes to process a foreclosure.

Sometimes a lender will work with you offering a repayment plan or a loan modification: interest rate reductions, extended loan terms, and principal forbearance or forgiveness. If you are behind in your mortgage, speak to your lender and find out what you can do to lower your payments and continue to stay in your home.

Refinancing your Home Loan

State and federal governments have implemented foreclosure prevention efforts. Many private lenders and mortgage services participate in federal foreclosure prevention initiatives to work with borrowers who are having difficulty making their mortgage payments.

Bankruptcy

You can avoid or delay foreclosure on your home by filing bankruptcy. Both Chapter 7 and Chapter 13 bankruptcy have feasible options when facing foreclosure. As soon as you file for bankruptcy, an automatic stay goes into effect, and all creditors action for payment must stop.

Chapter 7 bankruptcy is considered a liquidation bankruptcy. With this form, you can delay the foreclosure process allowing you the time to find a solution with the lender. If you decide that you no longer want to be in the home, you can surrender the house, and it will be sold to satisfy the debt.

Chapter 13 bankruptcy allows you to enter into a court-approved repayment plan to your lender as well as making payments to stay current on the mortgage. This way you can keep your home as long as you make the payments.

If you have tried other options, or some are not available to you, you may want to talk to a Fort Worth bankruptcy attorney to see if filing bankruptcy can help you keep your home.


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