If you have fallen behind on your payments and are facing foreclosure, filing for bankruptcy can stop foreclosure on your home temporarily or allow you to catch up on your payments. Once the bankruptcy is filed, all creditors, including your mortgage company, must cease collection efforts. Your mortgage company would basically have to file a Motion to Lift Stay and seek permission from the Bankruptcy Court to proceed with the foreclosure. You would have to basically resume making your mortgage payments to keep your home in a Chapter 7 Bankruptcy, or you risk losing your home if the Bankruptcy Judge grants the Motion to Lift Stay.
You may be able to catch up on your missed payments if you file a Chapter 13 Bankruptcy. Bankruptcy does not wipe out your mortgage. The only exception to wiping out a mortgage is wiping out a second wholly unsecured mortgage (a second wholly unsecured mortgage is a second mortgage that has no equity) or a cram down of investment properties in a Chapter 13 Bankruptcy. Sometimes, however, the mere fact that you have filed bankruptcy can be leverage for you to negotiate with your Lender for different mortgage terms.
In many cases you can retain your home and automobile in a Chapter 7 Bankruptcy proceeding so long as you are current with your loan or work out a payment plan with your Lender and continue to pay on your home or automobile. If you are successful in obtaining a discharge of your unsecured debts, you can allocate the money you would have paid to your unsecured creditors to your mortgage lender or car lender. If the home or automobile has equity in excess of the allowed exemption amount, you might want to consider filing a Chapter 13 petition, which allows you to develop a plan for repaying your creditors without necessarily liquidating your assets.
Other Home Options Include
Please feel free to contact us today so that we may discuss the options that are available to you.
Van Law Firm at 702-529-1011