How Can Bankruptcy Stop Foreclosure?

The recession that hit us hard in last couple of years has left many out there jobless, or to a lesser extent, with lower wages and salaries. And when your source of income is affected, you tend to struggle to stick to your payment schedules, especially for large payments such as your monthly loan payment for your home! Missing your mortgage payment for a few consecutive months would leave you vulnerable to the risk of being exposed to foreclosure proceedings, especially if your creditor is eager to recover his losses by selling your home to someone who is willing to buy it as soon as possible! If you are caught in such a situation, what can you do to stop foreclosure?

There are many methods and solutions available to homeowners today that seek to put an end to foreclosure proceedings. For one, you could try negotiating with your creditors to delay foreclosure until you get your finances in place, probably with the aid of a hardship letter. Or you could try to refinance your home by making use of the government’s foreclosure assistance! If any of these solutions do not work, then you could, as a last resort, opt for the most drastic move of them all, bankruptcy! File for either Chapter 7 or Chapter 13 Bankruptcy now, and forget about mortgage debts ever again!

Do not fall into the delusion that you would be able to save your home through filing for bankruptcy. The truth is you would not be able to salvage your home, but you can definitely stop foreclosure once you file for bankruptcy, and get your lenders off your back for good! Not only will you eliminate all your current debts, you can also make sure that your creditors do not have the capability of suing you for missed payments in the future after you are declared bankrupt. Nevertheless keep in mind that bankruptcy should only be taken into serious consideration once all other ways of stopping foreclosure has been exhausted, as it has serious implications on your financial stability, especially for the long run! Once you are declared bankrupt, you would struggle to get approval for future loans and credit cards, and even have difficulties when you apply for future employments.

So can bankruptcy stop foreclosure? Most definitely yes, but only if you know how the concept of bankruptcy works, and you utilize decent bankruptcy lawyers to help you out with your case.

If you are facing a foreclosure in Austin, Bankruptcy can be an option to prevent you from losing your home.

Filing for bankruptcy of any type generally stops the foreclosure on your home. The automatic stay of bankruptcy goes into effect the moment you file a bankruptcy case which will stop most collection efforts against you. Your mortgage lender, the taxing authority, a homeowners association or whoever is foreclosing on you must cease their foreclosure actions immediately. You will then have some time to decide what to do.

Filing a Chapter 13 Bankruptcy will stop foreclosure, and can allow you to repay your past due payments over 3 to 5 years. Filing Chapter 13 Bankruptcy stop foreclosure and prevent your home from being sold. Chapter 13 is a debt relief option that can not only stop foreclosure and allow you to save your home, but can also allow you to keep your other property while repaying your debts on your terms. Disposable income from your regular income is what usually funds a Chapter 13 repayment plan. Chapter 13 was designed to help people facing foreclosure and other potential losses of property. Stopping foreclosure is the primary reason people file for Chapter 13 bankruptcy. So, if you are eligible, Chapter 13 can stop foreclosure on your Austin home.

If your lender is threatening foreclosure or has initiated foreclosure proceedings, you should contact us right away.

You cannot save your home once the foreclosure sale has begun. Unless you’ve recently filed a previous bankruptcy case, Chapter 13 will most always stop the foreclosure. If you’re like most people in Austin, your home is your biggest investment. So when you are facing a foreclosure and the prospect of losing your home, you risk losing your biggest investment.

Don’t wait until the day before the foreclosure sale to do something or it may be too late.

*This article is originally published at http://austin.rjabankruptcy.com

Can Bankruptcy Stop Foreclosure?

Many people that find themselves filing for bankruptcy are often in the middle of losing there homes in foreclosure proceedings. Saving one’s home by filing bankruptcy can be tricky, depending on the circumstances, however, it is possible.

Identification
Filing bankruptcy, is a request for the court to forgive debts and allows for “room” in order to pay off creditors. Personal bankruptcies are filed under chapter 7 or chapter 13 of the Federal Rules of Bankruptcy Code. These laws are tailored to serve people with different sets of circumstances. However, they are also specifically defined. While both chapter 7 and chapter 13 result in protection from the court, they differ in several areas. In regards to foreclosure, both Chapter 7 and 13 filings are treated relatively the same during the initial stages of the process.

Types
It is commonly thought that a chapter 7 always means a court forgives the debts of those seeking protection. However, in this type of bankruptcy, the court determines which assets a person may have that could be liquidated to pay her creditors. This includes equity in real estate. If a client has no non-exempt assets to be liquidated, the court would then make a decision whether to discharge debts included in his petition for protection. A chapter 7 bankruptcy is also known as a “liquidation” plan.
Debtors filing for bankruptcy under chapter 13 are treated differently by the courts. Under chapter 13, each debtor proposes a creditor repayment plan to the court. The court decides if this plan is acceptable and a three or five-year repayment plan is commenced. Bankruptcies falling under the chapter 13 law are sometimes called debt “reorganization” or “repayment” plans.

Features
In the beginning stages of both chapter 7 and chapter 13 bankruptcy, the court will issue an automatic “stay” in all collection activities. This court action will also stall a foreclosure for several weeks to a few months, depending on when the foreclosure was initiated. During this period, creditors, by law, must cease their attempts to collect unpaid debts until either the court discharges a bankruptcy or until the stay is lifted. It is also possible, however, for creditors to file motions to have any stays lifted before the court decides to do so. The purpose of a stay is to give the debtor time to gather pertinent the financial information they wish to include in their bankruptcy petition. This will also give a homeowner time to decide whether to keep their home.

Misconceptions

Although an automatic stay is usually issued in both a chapter 7 or chapter 13 bankruptcy and will stall a foreclosure, it does not guarantee a debtor that will keep their homes. With chapter 7 bankruptcies, creditors, especially home lenders, are usually able to continue collecting unpaid debts after stays are lifted and bankruptcies are discharged. This means that a foreclosure may proceed, as initiated, after a bankruptcy is complete,which means that a homeowner will still lose their house. In chapter 13 bankruptcies, foreclosures are usually stopped if the debtor agrees to make up missed payments as part of the repayment plan and make regular payments on time thereafter. It is also common for automatic stays to remain in place for the life of a chapter 13 repayment plan. Chapter 13, therefore, is the best option for stopping foreclosure.

Considerations
Stopping foreclosure by filing bankruptcy is something that could also be quite tricky, depending on the laws of each state. There are many variables that could, in some cases, make the process a bit more complicated than desired. An experienced bankruptcy attorney should be consulted. Most bankruptcy lawyers provide free consultation and advise, based given circumstances, which bankruptcy plan is right for each client. He or she will also prepare the necessary forms need to file bankruptcy petitions and assist homeowners in dealing home lenders that have already initiated the foreclosure process.

About the author:
By Jim Hagerty, eHow Contributor
Read more: Can Bankruptcy Stop Foreclosure? | eHow.com

How to Stop Foreclosure With a Bankruptcy in Oakland

Bankruptcy helps individuals and businesses repay overwhelming debt by arranging for a payment plan that helps them make payments to their creditors in an orderly and affordable manner. Filing for bankruptcy in the case of a foreclosure will stop the foreclosure process until the bankruptcy is rescinded, at which point the foreclosure process can continue. Bankruptcy is regulated by federal law; therefore, any filing for bankruptcy must be done in federal court.

1 Get credit counseling at least 180 days before filing. The new bankruptcy law requires that individuals receive credit counseling before filing for bankruptcy. Obtain proof of such counseling. What this means in practical terms is that once you start getting behind on your mortgage payment, and you think bankruptcy is an option you want to explore, you must get credit counseling right away so that you don’t find yourself with a foreclosure sale date looming and you can’t file for bankruptcy.

2 Compile your financial records. When filing for bankruptcy you must prove that you are overwhelmed by your debt and can no longer pay. Get your bills together and all your creditor information to prove this. Have your financial statements with details of income and expenses to show you are unable to make your mortgage payments.

3 Study the federal government bankruptcy website (see Resources below) extensively and obtain specific information for the bankruptcy court in the Northern District of California under which Oakland falls.

4 Print and fill out the necessary forms, which are available on the bankruptcy website. The forms are also available to fill out on the site.

5 Gather all the documentation required, as well as your filing fees, and file the paperwork in the bankruptcy court. You should file it at the federal bankruptcy court in Oakland, located at 1300 Clay Street, Suite 300.

While it is possible to do this on your own, it is still a good idea to get the advice of and services of a bankruptcy attorney. It usually costs a few thousand dollars.

About the author:
By Faith O, eHow Contributor
Read more: How to Stop Foreclosure With a Bankruptcy in Oakland | eHow.com