The idea of bankruptcy and foreclosure is not appealing for many people struggling with financial issues. However, both of these terms come with a lot of misconceptions, and they can actually be beneficial for you and your family. It’s important that you know the ins and outs of bankruptcy and foreclosure before you get to the point of filing. In today’s post, Groce & DeArmon will take a look at what you need to know about bankruptcy and foreclosure.
Bankruptcy Can Stop Foreclosure
The reason bankruptcy and foreclosure are often mentioned in the same context is because the process of bankruptcy can often stop — or at least pause — foreclosure. Depending on whether you file for chapter 7 or chapter 13 bankruptcy, the foreclosure process will be different. If you are filing under chapter 7, there will be an automatic stay on the loans on your assets, keeping most of your assets temporarily protected and preventing the bank from foreclosing on your home.
This automatic stay doesn’t last forever, but it will give you time to begin getting your finances in order. Simply entering into bankruptcy will not save you from foreclosure, but it is an important first step.
Foreclosure Isn’t Always Preventable
Even during an automatic stay, the bank or lenders can file for something called a motion for relief, which allows them to continue the foreclosure process even as you are under the protection of the automatic stay. They can’t completely foreclose on the home, but they are able to continue working through the process as they wait for the automatic stay to be lifted.
While avoiding foreclosure is ultimately the goal, in some cases it simply isn’t possible. Bankruptcy can slow the process of foreclosure — even if it is inevitable — to help give you and your family time to get your feet under you and prepare to move forward.
Bankruptcy and Foreclosure Often Go Hand-In-Hand
Bankruptcy and foreclosure are very often spoken of together because, in many respects, they go hand-in-hand. As noted, if you are facing a potential foreclosure, bankruptcy is a way for you to at least pause the process, and if you file with chapter 13, it can even help you establish a payment plan on your debt.
Contact Groce & DeArmon For More Tips
Nobody ever wants to be faced with bankruptcy and foreclosure. However, it is important to recognize the situation, so you will be informed and prepared to handle it. For more information or tips, give Groce & DeArmon a call at (417) 862-3706 or contact us online today
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