Filing Bankruptcy To Save Your Homer? Know These 3 Things

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bankruptcy and the recovery after

Credit issues can arise more quickly than you might ever think. Within two years, my credit went from outstanding to outrageous and it all happened quickly. One day, I went into work like I normally did to find out that the plant was closing down and that many of the employees were let go immediately. I had no way to pay the bills that I owed each month. My only option after months of searching for work was to file for bankruptcy. This blog will tell you about the bankruptcy process and how to recover after it is all said and done.

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Filing Bankruptcy To Save Your Homer? Know These 3 Things

15 June 2018
 Categories: , Blog

Are you potentially facing foreclosure on your home due to a financial problem? If so, know that losing the home is not your only option. It's possible for you to save it by using bankruptcy. Here are some important things to know when using bankruptcy in this difficult situation.

1. You'll Get an Automatic Stay

When you start the bankruptcy process, you'll receive legal protection called an automatic stay. It prevents all of your creditors from contacting you about the debts that you owe while the bankruptcy proceedings are being processed, including a foreclosure. This can buy you a few months to get your finances back on track so that you can keep your house, which is time you wouldn't otherwise have if you did nothing. At the very least, it can give you some additional time in the house while you do not pay your mortgage, giving you time to save up for a move to an apartment.

2. Your Lender May Request The Automatic Stay Be Lifted

Be aware that there is a possibility that your mortgage lender will make a request to have the automatic stay on your home lifted. If the requested is granted, the foreclosure on the home will continue as it originally would have. While this is not a good situation to be in, know that it is not common for judges to grant this request. The creditor must prove their case as to why the automatic stay should be lifted, since requests are not automatically granted.

3. You Can Use Chapter 13 To Save The Home

The two common types of bankruptcy proceedings are Chapter 8 and Chapter 13. The main differences between these two methods is that it's likely that you won't keep the home with Chapter 7 bankruptcy, but Chapter 13 could allow you to keep it. Chapter 13 will set up a formal payment plan that includes your mortgage, which allows you to pay back those missed payments over a long time period. While you must continue making current payments, you'll buy time to pay back the ones you missed. This is ideal for anybody that has lost employment and fell on hard times for only a few months.

The key to using Chapter 13 bankruptcy to save your home is being eligible to use it. It is best to work with a bankruptcy attorney that can navigate you through the complicated legal process of bankruptcy.