In Part I of the Preventing Foreclosure series, you received an introductory look at how to keep your home, with Part II of this six-part series emphasizing the power of being proactive, providing even more specifics on the best ways to prevent impending foreclosure proceedings by working directly with your mortgage lender before you find yourself falling behind.
If you are already behind on your mortgage payments, it's hard to negotiate with your lender. With so many Americans behind on their mortgages, loan servicing companies simply don't have the manpower to address every delinquent mortgage. But you have options- Chapter 13 or Chapter 7 bankruptcy proceedings can force creditors to end their collection activities and delay a foreclosure sale.
Part III – Chapter 13 Bankruptcy
When examining your options for saving your home, if you find you are in arrears, but also have regular income to catch up with those back payments, just not all at one time, you may find that Chapter 13 bankruptcy is your best first step in protecting your biggest asset. As such, filing a Chapter 13 bankruptcy stops foreclosure on your home and restructures your debt into a more manageable payment plan— allowing homeowners to pay back what they owe on their mortgage over time, often at a percentage of the cost.
Good Way to Pay With the Automatic Stay
Under the Bankruptcy Code, a debtor in Chapter 13 bankruptcy is protected by the automatic stay. This stay stops creditors in their tracks and prevents their collection actions, including foreclosures. This stay continues working throughout the duration of your bankruptcy case, as long as you adhere to the guidelines set by the court; meaning as long as you remain current on your payments to your bankruptcy trustee, you should come out of the bankruptcy current on your mortgage and with your home.
Best Steps For Protecting Your Home With Bankruptcy
Filing bankruptcy can be a good first step in preventing mortgage foreclosure. When contemplating foreclosure or bankruptcy, it’s also important to follow some basic steps.
Talk to an Experienced Attorney. A bankruptcy lawyer like the experience attorneys at The Law Offices of John T. Orcutt can not only help you figure out whether bankruptcy makes sense in your case, but also keep you updated on the latest foreclosure findings facing our nation.
Be Proactive. With your home on the line, move quickly and take measures to assure you home is at stake here, and staying quiet when you have questions or concerns will get nothing done. Speak up early and often to learn as much as you can about the future of your home.
Get Educated. John T. Orcutt’s Bankruptcy Blog (“Bankruptcy and Your Passage Into and Out of Debt”) offers a wealth of information on the benefits of bankruptcy and for people facing foreclosure. Educating yourself about both will help you prepare for your financial future.
Start Today. For more information regarding mortgagor benefits of bankruptcy filing, visit The Law Offices of John T. Orcutt’s “Things to See and Hear” information.