Can Bankruptcy Stop Foreclosure in Arizona

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Can Bankruptcy Stop Foreclosure?

Receiving a foreclosure notice from the bank and worrying about losing your home can be stressful and confusing, and many people faced with foreclosure have no idea what to do and where to turn for reliable help. If you have fallen behind on your mortgage payments and are now facing a home foreclosure, you may not realize that there are options available to you for stopping the foreclosure process and saving your home. One of these is bankruptcy. To learn more about filing bankruptcy and how it can stop a foreclosure, contact our reputable Arizona bankruptcy attorneys at Wright Law Offices as soon as possible. We have the skill and expertise necessary to help homeowners evaluate their options and determine whether filing bankruptcy makes the most sense for stopping a foreclosure.

Bankruptcy and Foreclosure

Facing foreclosure is a frightening prospect, but it’s not an uncommon one. Thousands of Americans find themselves unable to make their mortgage payments on time, often with no idea that there are steps they can take to get their finances back on track and avoid losing their home, possibly including filing bankruptcy. The fear of losing their property and possessions is one of the main reasons people shy away from filing bankruptcy, even when facing crippling debt and impending foreclosure. What many people don’t realize is that bankruptcy can stop a foreclosure proceeding immediately and at any time, and it may even help them save their property in the long run.

Concerns about the consequences of filing bankruptcy are not unfounded; some people do lose their property in bankruptcy. But with careful planning and the guidance of a reputable bankruptcy attorney, you can eliminate any surprises and get the best possible outcome in your bankruptcy case. How exactly you go about stopping the foreclosure process and saving your home by filing bankruptcy depends on the type of bankruptcy you choose.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is known as liquidation bankruptcy, because when you file, a bankruptcy trustee will liquidate your assets and use the proceeds to repay your debts. In some cases, that may include your home, if you are behind on payments or there is significant equity in your home that the trustee can use to pay your creditors. However, just because you file Chapter 7 bankruptcy does not automatically mean you will lose your home. There are certain exemptions you can claim in Chapter 7 bankruptcy, which allow you to get a fresh start after your bankruptcy is finalized. If property is “exempt,” that means you can keep the property and you don’t have to turn it over to the bankruptcy trustee. If the homestead exemption under Arizona state law is enough to cover the entire amount of your home equity, you won’t lose it in bankruptcy.

Chapter 13 Bankruptcy

If you have discretionary income and you want to save your home and catch up on missed payments, a Chapter 13 bankruptcy may be the best debt relief solution for you. Under a Chapter 13 repayment plan, you can cure your mortgage default, continue making your regular payments to your mortgage lender, and keep your property. Chapter 13 bankruptcy is sometimes called a wage earner’s plan, because it gives debtors an opportunity to reorganize their finances and repay all or some of their debts over time, under the supervision of a bankruptcy trustee.

During the life of your Chapter 13 repayment plan, which typically lasts between three and five years, you will make monthly payments to the trustee and the trustee will distribute the payments to the appropriate creditors. In some cases, you may be able to pay less than the total amount you owe. However, your mortgage arrears will have to be paid in full if you want to keep your home. Once you have completed your repayment plan and are current on your mortgage payments, you are no longer in default.

The Power of the Automatic Stay

No matter what type of bankruptcy you choose, you can take advantage of the automatic stay, an injunction that puts a stop to most debt collection and enforcement actions against you or your property by creditors attempting to collect the debts you owe, including a foreclosure sale. Simply by filing a bankruptcy petition with the court, you can stop the foreclosure process in its tracks and give yourself time to decide what your next move will be. Consulting an Arizona bankruptcy attorney is always a good idea when filing bankruptcy, as the process can be complex and time-consuming. With a knowledgeable bankruptcy attorney on your side, you can ensure that you choose the right type of bankruptcy for your individual situation and get the most out of your exemptions.

Our Arizona Bankruptcy Attorneys Can Help

If you are facing foreclosure and wondering what your options are for stopping the foreclosure and saving your property, our knowledgeable bankruptcy attorneys at Wright Law Offices can help. We have experience handling all types of bankruptcy proceedings, including Chapter 7, Chapter 11, and Chapter 13 bankruptcy, and we can help you determine the best course of action for your specific situation. Contact our law firm today for personalized legal advice from our reputable legal team.

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