If you have missed mortgage payments and the bank is ready to foreclose on your house, you may think that you don’t have many options. You do have some chances to stop this foreclosure though, and filing for bankruptcy might be the best one available to you. A New City bankruptcy attorney from our firm can tell you more about how this process could help save your home.

Does Filing for Bankruptcy Stop the Foreclosure Process?

Bankruptcy can stop the foreclosure process because filing gives you protection against lenders and creditors, and this includes the bank that holds your mortgage. An “automatic stay” is filed and that essentially pauses any collection activities. This includes collecting on your mortgage payments, including past-due payments, and moving forward with the foreclosure process.

This option may not be available to you if you have used the bankruptcy process to your advantage multiple times in the past. For example, if you kept filing and dismissing bankruptcy cases, the court might not decide to put an automatic stay in place. It’s also important to note that different types of bankruptcy can be better for stopping the foreclosure process. This is why it’s a good idea to talk to a lawyer before you do anything else.

Which Type of Bankruptcy Can Help Most Against Foreclosure?

When individuals file for bankruptcy, they usually choose from one of two methods. The first is Chapter 7, a liquidation bankruptcy that requires them to sell off most of their assets. This can delay foreclosure, but that’s it. You may be able to negotiate a deal with your lender, but this is not the best type of bankruptcy if saving your home is a priority.

Chapter 13 bankruptcy requires you to make a payment plan with your creditors. This can allow you to put a stop to foreclosure completely. You make up past payments with your payment plan, and then you just need to continue meeting your current mortgage payments. If you can afford all of these payments, you can keep your home.

Is It Really Worth Filing For Bankruptcy?

It can be worthwhile to file for bankruptcy if it can save your home. Some people worry because a bankruptcy filing can hurt their credit for years. We will be honest with you and tell you that this is true.

However, it’s important to remember that foreclosure does not look great on a credit report either! When you file for bankruptcy you may be able to save your home and reorganize other debts that were preventing you from making mortgage payments on time in the first place.

Contact Our Law Firm

If you are facing the foreclosure process, you may have options. Call the Lauterbach Law Firm and schedule an appointment with our team. We can help you figure out if filing for bankruptcy is the right choice.