There are many reasons for why people lose their homes to foreclosure: loss of income due to job loss or illness, or financial downturn. If you are facing losing your home to foreclosure, you need to know the options available to you, including bankruptcy.
Foreclosure is the process by which a homeowner loses his or her rights to a property because he or she was unable to pay the mortgage payments. Often times this happens because of loss of job, or other unforeseen events that causes a decrease in income. Typically a bank or mortgage lender will start pursuing foreclosure after three or four missed mortgage payments. When a homeowner is unable to pay off the outstanding debt or sell the house via short sale (in an attempt to re-coup lost payments) then the property goes to a foreclosure auction. If the property does not sell at the foreclosure auction, the lending institution then takes over the property’s ownership.
Foreclosure can be very scary, but there are options, including bankruptcy, that can help a homeowner stay in his or her home.
Filing for Bankruptcy to Stop Foreclosure
When you file bankruptcy, an automatic stay is initiated. This automatic stay is an order that prevents any collection efforts to be taken against you. This includes the sale of your home. While the automatic stay stops the scheduled sale of your home, you will still need to get caught up on the missed mortgage payments. Chapter 13 bankruptcy allows a homeowner three to five years to get caught up on missed payments. During that time no additional interest accrues on the missed payments. It’s important to remember that when you file for Chapter 13 bankruptcy you will still be required to make regular payments as they come due.
Working with a Bankruptcy Attorney
Bankruptcy can be an overwhelming process. That’s why we advise that you work with a bankruptcy law attorney that is familiar with various debt repayment options. We are committed to helping our clients understand their rights and options under the bankruptcy law and developing the debt relief solution that makes the most sense for each individual. We invite you to call (602) 648-3274 or contact our Arizona office to schedule a free initial consultation.
668 N. 44th St., Ste 320, Phoenix, AZ 85008