When Filing for Bankruptcy May Be a Good Idea to Stop a Foreclosure
One of the many foreclosure defense strategies that homeowners behind on their mortgage may consider is filing for bankruptcy, but is it the right choice for you if you find yourself up against a Goliath banking institution on the verge of taking over your home?
Maybe, but before taking any action, please get in touch with us right away to discuss your individual circumstances. The choice to file for bankruptcy is never a simple solution and it can come with serious risks and consequences.
How Filing for Bankruptcy Can Pause a Foreclosure
If a foreclosure sale is looming in the next days, one option to immediately stop the sale of the home is to file for bankruptcy.
Upon filing for bankruptcy, something referred to as an “automatic stay” goes into effect. This puts an immediate halt on the foreclosure and prohibits the bank from continuing to pursue foreclosure activities or trying to further collect any debts.
The bank’s next move is very likely to try to have the stay lifted, but even if the courts were to grant the bank’s motion to continue with the foreclosure, any foreclosure proceedings would be delayed by at least a few months. Because the foreclosure process is so slow, this gives you time to continue exploring other options for fighting to keep your home.
Chapter 7 vs. Chapter 13 Bankruptcy
If you’re considering bankruptcy, there are two types – Chapter 7 offers a way for you to sell your assets to get out of debt; Chapter 13’s purpose is to help you keep your property for the long term provided you abide by a repayment plan. Both will damage to your credit, but so too would a foreclosure.
With everything, it’s important to weight the risks, benefits, and your priorities for keeping your home when it comes to determining your best options for fighting the foreclosure.
At Jacobs Legal, we have the expertise to ensure that whatever your goals are, your rights will remain protected. We will fight to defend you from the Goliath institution you’re up against. Contact us today for immediate assistance.