What Homeowners Need to Know When Facing Foreclosure
Few things are more intimidating for homeowners than facing the prospect of foreclosure. When faced with this scenario, it may seem as if there are few options. However, foreclosure lawyers can tell you that you are not out of options until you have investigated everything – including bankruptcy.
Here is more information about how bankruptcy might be an option for your case and to halt your foreclosure:
What is an Automatic Stay?
If you are currently considering bankruptcy or have begun the filing process, you may have heard the phrase “automatic stay” mentioned. What is it and how does it impact you if you are facing foreclosure?
An automatic stay is a type of legal protection from the collection of debt. This includes foreclosure. If you file for bankruptcy before your foreclosure goes into effect, you will be protected from it by the automatic stay which is guaranteed to you as part of your bankruptcy proceedings. This is why some people choose bankruptcy as a way to both eliminate debt and avoid foreclosure.
To Keep Your Home or Not? (Chapter 13 or Chapter 7?)
While both types of personal bankruptcy – Chapter 7 and Chapter 13 – can offer protection from foreclosure and its financial impacts, they are not equal in their protection from the forfeiture of your property.
If you are looking to prevent foreclosure and are not concerned about keeping your home, Chapter 7 bankruptcy is a suitable option for you. It delivers a complete elimination of most types of debt, but may include the remittance of property or other valuables or assets to offset the costs of those debts to creditors. This means that while you won’t go through a foreclosure, you also won’t be likely to keep your home.
For those who need or want to keep their home – and who have the financial means to repay a portion of their debt, including payments missed on their mortgage which are paid through the reorganization – Chapter 13 bankruptcy may be a better option. This type of bankruptcy is more like a restructuring of debt that allows individuals to pay them down based on available income – and allows them to keep their property, valuables, and other assets.
Still not sure which type of bankruptcy is right for you? Contact the Law Office of Larry P. Karandreas, PLLC. We can help you navigate the process and make the right decision for your scenario.