Did you know that in the first six months of 2020 there were over 165,000 properties that filed for a foreclosure in the United States? Have you been considering filing for bankruptcy to stop foreclosure? If so, you are in the right place because we are going to go over all the facts you want to know about using bankruptcy to stop foreclosure.
Keep reading to learn more about filing bankruptcy to stop foreclosure.
Chapter 11 and Chapter 13
The most common types of bankruptcies you can file to stop a foreclosure include Chapter 11 and Chapter 13. A Chapter 11 bankruptcy will allow you to have a potentially longer-term solution of the amount that you have past due. Chapter 13 bankruptcy will allow you to propose a plan for you to repay the money you owe your mortgage company.
Chapter 13 is the best option for someone that wants to keep their home because you are restructuring your debts. Keep in mind that the only way to file for Chapter 13 is if you can prove that you have the income to back up your proposed plan.
Chapter 7 Bankruptcy
Another option is to file a Chapter 7 to temporarily stop a foreclosure and help you stall the foreclosure process. This type of bankruptcy is more of an emergency bankruptcy filing to stop foreclosure because it will only stop it for a month or two. The reason it is more short term is that you are not making any payments during this time.
You will have to negotiate with a foreclosing creditor outside the bankruptcy case in order to resolve your past due payments. If this short-term bankruptcy does not sound like it would work in your situation because you are so far behind then you might want to consider going the sell your house as is route instead. This will allow you to keep a foreclosure and a bankruptcy off your record and it might make it easier to move forward with renting a home in the future or buying a more affordable house later on.
Homeowner’s Association Fees
If your home is in a location that has a homeowner’s association fee, make sure that you do not fall behind on these payments after filing your bankruptcy. An HOA is considered a post-petition debt which means that this debt will not be eliminated via the discharge order from the bankruptcy court.
Now You Are Familiar With Bankruptcy to Stop Foreclosure Options
We hope that now that you know more about bankruptcy to stop foreclosure, you can make an informed decision on whether this is best for your specific situation or not. Please do not forget to check the laws in your state and contact a professional to ensure that you do not have any legal issues in the future.
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