Should You File For Bankruptcy To Stop Foreclosure?

Knowing that your home is facing foreclosure is one of the most stressful events you can experience. Chances are, you would do almost anything to be able to stop worrying and know that your home is safe. When you file for chapter thirteen, you are able to stop foreclosure on your home.

Filing for bankruptcy is bad for your credit, but sometimes it can save a home from foreclosure. Under chapter thirteen of the US bankruptcy code, debtors are allowed to submit a plan for repaying their debts. The foreclosure process is halted as soon as you file for chapter thirteen. However, your repayment plan is subject to review by creditors and must be approved by the bankruptcy court.

The first step in filing for chapter thirteen is to attend credit counseling. This is required by the bankruptcy code. Only certain agencies are approved for this counseling, so be sure to consult with your bankruptcy attorney to make sure the agency you use will qualify. The agency may come up with a plan for you to pay back your debts. If so, you have to give a copy of the plan to the court when you file for bankruptcy.

You are given fourteen days from the time you file for chapter thirteen bankruptcy until your proposed repayment plan has to be on file with the court. This window can enable you to go ahead and file if you need to get the foreclosure on your home stopped before you can finish your plan.

Before the judge considers whether to accept your plan, you are required to appear at a meeting of your creditors. The purpose of this meeting is to allow the mortgage company and other creditors to try to poke holes in your plan. Your creditors have a right to object if they do not feel they are getting as much as they are entitled to by law under your repayment plan.

After the creditor’s meeting has been completed, your repayment plan will be reviewed by the court to make sure that it meets the requirements set forth in the bankruptcy code. It can take up to 45 days for approval, but you have to start making payments according to the terms of the agreement within 30 days.

If you are able to stick to the repayment plan, chapter thirteen bankruptcy can stop foreclosure and save your home. However, if you default on the agreement, the court can convert your case to a chapter seven bankruptcy and sell off your assets to pay your debts. Because of the pros and cons involved with this plan, it is important to discuss this option with an experienced loan modification attorney before filing bankruptcy.

For assistance with loan modification contact a qualified loan modification attorney that will look out for you and your family’s best interest such as Janian and Associates.