How a Texas Bankruptcy May Help Stop a Home Foreclosure

 Posted on January 11, 2019 in Home Foreclosures

If you own a home, you are one of the millions of Americans who are lucky enough to have achieved the American Dream. The scary part is, you can have that dream taken away from you if you fall on hard times. Foreclosure is a very real thing that happens to households every day. Fortunately, you have a few options that you can choose from if you find it difficult to make payments on your home. The options available to you will depend on whether your financial distress is temporary or more permanent. If you are just temporarily having issues paying your mortgage, you can look at options such as a renegotiated repayment plan or forbearance. If your financial distress is more permanent, you can consider bankruptcy as an option to help you.

Automatic Stays and Bankruptcies

When you file for bankruptcy, all creditors, collection agencies, government entities and other people you may owe money to must cease to contact you about your debts. This is what is called an “automatic stay” and it can prevent the bank from taking action against you if you have an outstanding balance on your mortgage. The automatic stay begins the moment you file the paperwork for bankruptcy and prevents the bank from trying to start the foreclosure process on your home or if the process has already been started, the automatic stay prevents the process from moving any further. The length of the automatic stay depends on the type of bankruptcy you choose to file but lasts as long as the bankruptcy lasts.

Different Bankruptcies Produce Different Results

Chapter 7: This type of bankruptcy is one in which all of your debts are eventually forgiven, though it should only be used as a last resort. A Chapter 7 bankruptcy almost always results in a liquidation of your assets, meaning you will probably end up losing your home. If you do not see a way that you will be able to pay off your mortgage in the future, this may be your only option.

Chapter 13: This is the more permanent solution to help you save your home. A Chapter 13 bankruptcy will result in a repayment plan for all of your debts, including your mortgage. The repayment plan will allow you to spread out the past-due amount on your mortgage over three to five years. After the repayment plan is finished, you will be caught up on your mortgage, granted you must still pay your normal monthly mortgage payment.

A New Braunfels Bankruptcy Attorney Can Help You Fight to Keep Your Home

The thought that your home could be taken from you is a very scary one. If you are behind on your mortgage and you think a foreclosure could be on its way or you are already in the foreclosure process, you should seriously consider filing for bankruptcy as an option to help you keep your home. At the Law Offices of Chance M. McGhee, we understand how emotional it can be to even think about losing your home. Our experienced Schertz bankruptcy lawyers can help you determine if bankruptcy is a viable option for you and what kind of bankruptcy you should file. Call the office today at 210-342-3400 to schedule a free consultation.

Sources:

https://www.investopedia.com/terms/a/automaticstay.asp

https://money.cnn.com/2010/07/21/real_estate/bankruptcy_and_foreclosure/index.htm