Foreclosure Madness
Sometimes consumers will have to opt between filing bankruptcy or allowing their mortgage lender to foreclose their property. If monthly home loan payments are not received as scheduled, the bank can file a foreclosure on the home. You can disrupt the home foreclosure process by paying the home loan lender on time. Foreclosure will be very same for everyone who has not paid his or her home loan; the bank will start the foreclosure process. Mortgage loans are much similar to car loans, if you can not make monthly payments you can get it repossessed.
Bankruptcy is a legal act that is registered by a person who is unable to pay their debt as agreed. Once filed, all active civil proceedings associated with the mortgage are put on hold. Therefore, legally, a mortgage bank has to cease all collection actions, including foreclosure. A home loan lender can be given a break from the required stay, and if it is allowed, may go on with the foreclosure action. Filing for Bankruptcy will not halt foreclosure and you still must repay your mortgage. Bankruptcy only makes the process of foreclosure proceed slowly; it does not resolve the underlying problem.
Even though bankruptcy is not going to halt foreclosure for good, it could allow an individual enough time to pay back the past due or at a minimum makes it little easier to repay a lender. Since bankruptcy requires a mortgage to put a hold on a foreclosure action, a home owner has a bit of time to raise the funds necessary to pay the creditor. It is the last option for any debtor to declare bankruptcy when the debtor is totally unable to satisfy their creditor’s minimum commitments. With bankruptcy, some unsecured debt will in all probability be discharged but the home loan will not be cleared. The home loan borrower has to be ready to repay the mortgage within the required time frame as the debt is guaranteed by assets. Also, Chapter 13 bankruptcy has a pay schedule that is ordered by the bankruptcy court, and will allow the borrower make payments on their real estate loan to get caught up to date on their mortgage payments.
Insolvency isn’t a given. The home owner has to meet particular criteria to qualify and if so, there will be legal fees to pay. It might cost more in legal fees than if they were to just buckle down and keep making mortgage payments. If you are considering that filing for insolvency might help to solve the situation, a good attorney should be capable of answering whatever questions you have. Simply put, insolvency proceedings are really complicated, house owner really should not attempt to do it on their own.
This is not legal advice. We have not made any representation that this is legal advice. Contact a bankruptcy lawyer in your particular state for bankruptcy advice advisement.
