One thing that can sometimes be effective to stop foreclosure is filing for bankruptcy. If you decide to take this step, it’s important to make sure you are filing for chapter thirteen bankruptcy reorganization, not chapter seven bankruptcy. A chapter seven bankruptcy will not save your home because your assets are sold off a during chapter seven bankruptcy.
If you have a reasonable amount of debt that might be manageable if you are able to change the terms, then you might be able to do a bankruptcy reorganization. This type of bankruptcy is not for people who are drowning in so much debt that they will never be able to pay it off regardless of the terms.
The best part of filing for chapter thirteen bankruptcy is that it usually stops the foreclosure process immediately. This is not a permanent thing though. It’s just a temporary stay until the bankruptcy proceedings are completed. Some people choose to take advantage of this stay to try to get their house sold if they have a sale pending. It may buy enough time to allow you to complete the sale before the foreclosure goes through. However, a bankruptcy looks just as bad as a foreclosure on your credit report so that should be taken into consideration.
The combination of bankruptcy and foreclosure on your credit report looks really bad to future prospective lenders. For that reason, you should consider your options carefully before choosing to file for bankruptcy in order to stop the foreclosure on your home.
Although the credit repercussions can be severe, many people opt for chapter thirteen bankruptcy in an attempt to save their homes. In fact, bankruptcy reorganization is often the only realistic option to prevent foreclosure of a home. Under bankruptcy reorganization, you and your attorney will come up with a plan to pay off your debts. A federal bankruptcy judge will then have to approve your plan.
One of the major pitfalls of reorganization is the danger of falling behind on payments again. Bankruptcy is your last chance. If you decide to go this route, you must be careful to stick to your plan. Any deviation could put you right back into bankruptcy court, this time to force the sale of your assets. If you set up a reorganization plan, be sure that you will be able to follow through on it. Don’t agree to payments you aren’t going to be able to keep up with.
A reorganized payment plan is not guaranteed when you enter chapter thirteen bankruptcy. The judge may determine that you are unable to pay off your debts and refuse your plan. It is a good idea to discuss your case with a good bankruptcy attorney before deciding to proceed with chapter thirteen bankruptcy. An experienced attorney will have a pretty good idea of how likely you are to be able to reorganize your debts under chapter thirteen.
Chapter thirteen reorganization is not for everyone, but in some cases it is the best chance at saving a home from foreclosure. Make sure you research all of your options thoroughly before deciding to file for bankruptcy and decide for yourself whether the potential benefit is worth having a negative mark on your credit report.
No body on the planet needs to lose their house. This is why there are so many people looking for a way to Stop Foreclosure. If you are one of them, you may want to look for Foreclosure Help.
