While surveys are indicating that the housing market is improving, there are still many homeowners facing foreclosure. If your mortgage lender is threatening to foreclose on your home, it is time to schedule an appointment with us to determine if bankruptcy is the best option for you.
When you file a personal bankruptcy case, the automatic stay is immediately effective. The stay is a type of injunction that prevents creditors from proceeding with any further collection efforts against you. In other words, all of the harassing telephone calls, demand letters, and lawsuits (including foreclosure actions) must come to a halt.
The two most common types of personal bankruptcy are Chapter 7 and Chapter 13. There are pros and cons to each, so it is essential that we discuss which type is best for you. You can obtain help with your foreclosure action in either type of filing.
In a Chapter 7 case, the foreclosure action can be stopped for a certain amount of time. This additional time allows you to remain in your home longer as well as gives us an opportunity to negotiate with your mortgage lender. It is important to understand that a homeowner in bankruptcy is not allowed to keep a house pledged as collateral to a secured lender without paying the loan. A secured creditor, such as your mortgage lender, can file a motion for relief from the automatic stay. If the court grants the motion, your lender will be allowed to move forward with the foreclosure. However, if this occurs, you will be able to discharge or eliminate any deficiency balance remaining after your home is sold.
In a Chapter 13 case, you must file a repayment plan that sets forth how all of your creditors, including your mortgage lender, will be paid in full or in part. Your plan can provide for payments to be paid over the three to five your period to catch you up on any past due mortgage payments. As long as you are making timely payments to the Chapter 13 trustee, the mortgage lender cannot proceed with the foreclosure. Once your plan is concluded, you will be current on your mortgage obligation.
If you are facing foreclosure and you want to learn more about how filing a Chapter 7 or Chapter 13 can help, contact us today.
If you are considering filing for bankruptcy protection, let us help. We understand how important your bankruptcy case is to you, and we will handle it with the discretion and dedication that have become our calling cards. Contact the Milwaukee bankruptcy attorneys of the DeLadurantey Law Office, LLC today by calling 414-377-0518. Like us on Facebook.