Chapter 7 Bankruptcy
You can buy extra time to live in your home during a foreclosure, and any prevent any deficiency if the home is foreclosed without a tax problem with a Chapter 7. However, a Chapter 7 only temporarily stalls a foreclosure sale. If your real goal is to avoid foreclosure, you may want to consider Chapter 7 before you file a Chapter 13. A Chapter 7 will allow you to totally eliminate the unsecured debt first and you may be able to file a Chapter 13 later which only has to then pay the arrearage on the mortgage.
By filing a Chapter 7 first you can avoid repaying anything to unsecured debt in any Chapter 13 you file later and your Chapter 13 repayment may be much lower. To catch up an arrearage and permanently stop a foreclosure you must file a Chapter 13 and successfully catch up the mortgage during the Chapter 13. But it may be unaffordable if you must also repay the unsecured debt in the plan.
Chapter 13 Bankruptcy – The Answer to How to stop a Foreclosure Bankruptcy allows you to discharge (destroy your legal obligation to pay) almost any debt unless you have over hundreds of thousands in debt. People with very large debt loads over what is normally over 1.25 million must file either a Chapter 7 or a Chapter 11 instead of a Chapter 13.
Chapter 13 is the normal answer to stopping a foreclosure. Immediately after filing, the “automatic stay” temporarily stops the foreclosure until the permanent court order called a discharge is granted.
You have to make the current monthly mortgage payments plus some amount to catch up the payments within the 5 years that most Chapter 13 cases take. Your case may be less than 5 years if you can repay early. If the only debt in your Chapter 13 is your mortgage you will only have to repay the arrearage and the court costs and attorney fees to complete your Chapter 13 and stop the foreclosure.
You should always file Chapter 13 before you fall too far behind in payments or the amount you will have to repay in Chapter 13 may be unaffordable or it may be too late to stop the foreclosure sale.
{ 0 comments }
