Does Bankruptcy Stop Foreclosure
Michigan homeowners may be experiencing financial difficulties related to the current health & economic crisis. Many mid-Michigan residents who are paying mortgages are facing challenges such as job loss, uncertainty about the future, and reduced or loss of income.
A common question asked is: Can bankruptcy save my home?
The answer isn’t a simple “yes” or “no.”
Bankruptcy Stays Foreclosure
Bankruptcy can save your home from foreclosure. When a bankruptcy case is filed with the court the “automatic stay” order is entered. The automatic stay is a court order that pauses almost all collection activity, including foreclosures. Whether the mortgage lender is threatening foreclosure or a foreclosure action has already begun, the automatic stay stops the foreclosure. That’s true even if a foreclosure sale is already scheduled.
What happens with your home depends on which type of bankruptcy you file.
Chapter 7 Bankruptcy and Foreclosure
Chapter 7 bankruptcy generally isn’t a long-term solution to mortgage problems. A Chapter 7 case temporarily stays the foreclosure, but it does not cure the mortgage default. As a result, the mortgage lender can continue with the foreclosure because the loan remains in default.
A Chapter 7 is an opportunity to eliminate personal liability for the home loan and any potential deficiency owed to the mortgage lender after a foreclosure when a homeowner surrenders their home.
Chapter 13 Bankruptcy and Foreclosure
Chapter 13 bankruptcy cases are quite different than Chapter 7 cases. Chapter 13 cases provide a way for debtors to manage secured debts, including mortgages and auto loans.
When a mortgage is in default the homeowner can pay the past due balance over time in a three to five year Chapter 13 reorganization plan. The Chapter 13 plan prevents the foreclosure, and the mortgage is brought current over time while the ongoing payments are paid. Additionally, a Chapter 13 plan can restructure auto loans and discharge unsecured debts such as credit cards & medical bills.
Attorney – Free Office Consultation
Talking with an experienced bankruptcy attorney is the best way to obtain information regarding Chapter 13 bankruptcies.
You can schedule a consultation with attorney Joshua Reinert right now. Just call (989) 799-8860 or fill out the contact form on this site.
Josh Reinert is a highly qualified attorney with a well-trained and experienced staff that will give you personalized service and the debt relief you seek. Reinert & Reinert serves Alcona, Alpena, Arenac, Bay, Cheboygan, Clare, Crawford, Gladwin, Gratiot, Huron, Iosco, Isabella, Midland, Montmorency, Ogemaw, Oscoda, Otsego, Presque Isle, Roscommon, Saginaw and Tuscola Counties.
Contact us today for your free consultation and to find out why 13,000 families and businesses have trusted Reinert & Reinert to assist them with their finances during tough times.
If you’re facing foreclosure, you can’t afford to delay.