The economic situation across the globe is highly volatile and has seen some turbulent times in the recent past. Many home-owners lose their homes due to the sudden downturn and loss of income. The home that you worked so hard to build can be saved from foreclosure by your bank with some simple steps. The moot question is can bankruptcy stop foreclosure? Astonishingly the answer is yes!
A chapter 13 bankruptcy filing can put an immediate stop to creditors from following through with any debt collection action against you. This is inclusive of foreclosure proceedings. If you fulfil the criteria required to file for Chapter 13, you are literally home free. If you are within 90 days late in your payments, talk to your creditor immediately to work out a compromise. It is fairly easy for the bank to work out a solution for you if you are only a couple of months late.
How to stop a foreclosure with chapter 13
While you might feel that it is morally wrong to file for bankruptcy, do remember that it is your only chance to save your hard earned home from foreclosure. Chapter 13 bankruptcy gives you a window in which you can stave off foreclosure. An automatic stay will come into force when you file for a chapter 13 bankruptcy. No creditor can ask you for payments once the filing is approved. This is a temporary measure till you can form a plan of restructuring your debt.
Within 15 days of filing the petitioner has to come up with a plan to repay creditors. Mortgage payments should be reconstructed with your creditors with maybe a lower rate of interest or a longer repayment plan that suits your current income. If you manage to pay the monthly payments on time the foreclosure might be stopped. But if you continue to miss payments even in the new schedule the automatic stay is lifted and the formal foreclosure proceedings started.
The game changing plan
It is very important to take professional help to restructure your payment schedules and structure before filing for chapter 13 bankruptcy. You must ensure that you have a job or a steady source of income. There are limits on the amount of secured and unsecured loans that you can hold at the time of filing for bankruptcy. Do make sure that you qualify for filing.
It is important that you take swift action to avoid the foreclosure of your home. Assess your financial condition well to save your home. Go forward with a lot of preparation and planning towards restructuring your payments, so that the exercise does not become only a temporary measure. A good plan can save your home and a lot of heart-ache for you and your loved ones.