Have you been notified of foreclosure? If you want to keep your home, bankruptcy may be a viable option. As soon as bankruptcy is filed, an automatic stay goes into effect. This automatic stay prevents creditors and collection agencies from attempting to collect debts, including your home debts.
Bankruptcy may not be right for everyone trying to protect their home against foreclosure. Before considering bankruptcy, we suggest trying alternative foreclosure defense methods such as:
- Loan forbearance, reinstatement, or modification
- Short sale
- Deed in lieu of foreclosure
We encourage you to call and discuss your case with us. Often, there is an available defense to foreclosure. Sometimes, that defense is bankruptcy. Other times, a less extreme measure is possible.
As soon as you file Chapter 7 bankruptcy, automatic stay halts the foreclosure process until bankruptcy is complete, usually about three or four months. Keep in mind that your lender is required by law to give you three months' notice before they sell your foreclosed home. If you have just received a three months' notice, it is important to speak with an attorney as soon as possible, because even if your bankruptcy is still pending, at the end of those three months, your lender could file a motion to lift the stay and pursue the sale of your foreclosed home.
If there is a lien on your home then Chapter 7 bankruptcy cannot stop the lender from foreclosing on your home. While Chapter 7 bankruptcy does get rid of your mortgage debt, it cannot remove a lien. A lien simply means that your home is collateral for the home for which you took out the loan. If you fail to make mortgage payments, the lien allows the lender to take back the home as payment. Essentially, Chapter 7 bankruptcy is only a temporary halt to the foreclosure process.
However, filing Chapter 7 or Chapter 13 before you receive notice of foreclosure may help. If you recognize that you will be falling behind on your mortgage payments, contact a San Diego bankruptcy attorney at our firm. Discharging or reorganizing your debts could save your home. To learn more, contact us today.