Why You Should File for Bankruptcy to Stop Foreclosure

One thing that can sometimes be effective to stop foreclosure is filing for bankruptcy. If you decide to take this step, it’s important to make sure you are filing for chapter thirteen bankruptcy reorganization, not chapter seven bankruptcy. A chapter seven bankruptcy will not save your home because your assets are sold off a during chapter seven bankruptcy.

If you have a reasonable amount of debt that might be manageable if you are able to change the terms, then you might be able to do a bankruptcy reorganization. This type of bankruptcy is not for people who are drowning in so much debt that they will never be able to pay it off regardless of the terms.

The foreclosure process is usually stopped by filing for bankruptcy. This is not a permanent situation, however. Filing for bankruptcy does not guarantee that the foreclosure will not proceed. However, the foreclosure will be halted temporarily so that you can attempt to reorganize your debts. If you have another plan for avoiding foreclosure that requires more time, such as a pending sale on your home, this tactic can help you buy the time you need. However, filing for bankruptcy will add another negative mark to your credit report on top of the foreclosure.

The combination of bankruptcy and foreclosure on your credit report looks really bad to future prospective lenders. For that reason, you should consider your options carefully before choosing to file for bankruptcy in order to stop the foreclosure on your home.

If you are more concerned about keeping your home than what your credit report looks like, chapter thirteen bankruptcy may be just the right solution for you. If the court approves your reorganization, you will be able to make payments to your mortgage holder and other creditors according to the new payment plan agreed upon during the bankruptcy process.

One of the major pitfalls of reorganization is the danger of falling behind on payments again. Bankruptcy is your last chance. If you decide to go this route, you must be careful to stick to your plan. Any deviation could put you right back into bankruptcy court, this time to force the sale of your assets. If you set up a reorganization plan, be sure that you will be able to follow through on it. Don’t agree to payments you aren’t going to be able to keep up with.

A reorganized payment plan is not guaranteed when you enter chapter thirteen bankruptcy. The judge may determine that you are unable to pay off your debts and refuse your plan. It is a good idea to discuss your case with a good bankruptcy attorney before deciding to proceed with chapter thirteen bankruptcy. An experienced attorney will have a pretty good idea of how likely you are to be able to reorganize your debts under chapter thirteen.

Chapter thirteen does not help everyone. In fact, it can make things worse if you are unable to keep up with the reorganized debt payments. You should always do plenty of research before making a major financial decision, and this is no different. Learn all you can about bankruptcy and foreclosure before deciding whether chapter thirteen bankruptcy is the right choice for you.

No person on the planet needs to lose their home. This is why there are so many people looking for a way to Stop Foreclosure. If you are one of them, you may want to look for Foreclosure Help.