Bankruptcy and Foreclosure: Can Bankruptcy Help Me Avoid Foreclosure?
For a homeowner, foreclosure is almost always the worst case scenario. Hundreds of thousands of Americans foreclose on their home each year, and while 2017 saw foreclosures fall to their lowest level since 2005, it is still a threat to many homeowners. This is a major problem for many Americans, but there are solutions out there. One such solution for those facing foreclosure is filing for bankruptcy.
In today’s post, the bankruptcy and foreclosure experts at Groce & DeArmon walk you through the bankruptcy and foreclosure process and explain how bankruptcy could help you to keep your home.
What Is Foreclosure?
Foreclosure is when the lender takes possession of a property when the mortgagor fails to keep up with their mortgage payments. While some foreclosures happen when the homeowner abandons the home, most happen when they give the home over to the bank because they are unable to make the payments.
Bankruptcy and foreclosure often go hand-in-hand because both happen when there is extreme turmoil or struggle on behalf of a homeowner or renter.
How Can Bankruptcy Help With Foreclosure?
For homeowners facing foreclosure, finding financial stability and relief is the best chance of keeping your home. While it is preferential to find that stability through a better job or another income, those solutions don’t always present themselves. One way to find financial stability, especially for those who are in heavy debt, is through bankruptcy.
Bankruptcy carries a negative connotation, but ultimately, it is there to help people who are in debt work to get out of debt. It can also put an automatic stay on any foreclosure proceedings. When you file either Chapter 13 or Chapter 7 bankruptcy, the court issues what is called an automatic stay. This automatic stay stops all creditors from collecting on debts, including foreclosure. This isn’t a long-term solution, but it will give you time to figure out the best solution for you and your family.
Filing For The Right Type Of Bankruptcy
Bankruptcy is not a one-stop shop for your foreclosure solutions. Bankruptcy and foreclosure can work together, but only if you are eligible for the right form of bankruptcy. Filing Chapter 13 or Chapter 7 are the best forms of bankruptcy in terms of protecting your home from foreclosure. With both Chapter 7 and Chapter 13, you get the automatic stay, and if you and your family are set on staying in your home for the foreseeable future, Chapter 13 bankruptcy is the only way to do that.
Chapter 7 gives you the automatic stay but also often ends with the liquidation of assets, including your home.
Contact Groce & DeArmon for Bankruptcy and Foreclosure Advice
Bankruptcy and foreclosure are two words that few people see in a positive light. However, when they work together, they can help you to stay in your home long-term. For more information on bankruptcy and foreclosure dealings, contact Groce & DeArmon at (417) 862-3706 or contact us online today.