Life can feel arduous when you're overwhelmed by debt. This can feel especially burdensome if you have not made your mortgage payments for a long time. In such a case, you might experience sleepless nights worrying that your debtor might acquire your house and leave your family homeless. Nonetheless, declaring bankruptcy can be your lifeline because it may stop a potential foreclosure and provide you with an easier, more manageable way of repaying your mortgage debt. This might be possible if you file chapter 13, as you will learn in this discussion.
The Foreclosure Process
Some states permit debtors to conduct foreclosures without going through the judicial process. If you live in such a state, the lending company can acquire and sell your house without suing you. Instead, their legal team will likely handle the process privately. They start by sending you a letter requiring you to make all the outstanding debt payments within a certain date. If you don't do this, the company's attorney will then send you another letter indicating that the lender plans to sell your house. If this happens, you need to contact an attorney immediately for advice on how you can protect your home.
How to Stop Foreclosure by Declaring Bankruptcy
After sending you the foreclosure notice, the mortgage company can possess and sell your house within a few weeks. It is, therefore, imperative that you act fast to stop foreclosure. An important first step is to hire a bankruptcy attorney. They will contact your lender immediately to negotiate a payment plan and try to stop the foreclosure. However, this option might not work if the mortgage firm does not want to offer you more time to clear your debt. If this is the case, the firm might stall for time by continually requesting documents or other information from you. Then, at the last minute, they will likely inform you that you don't qualify to re-negotiate your payment plan.
This is why it is important to work with an attorney. The legal practitioner will start the bankruptcy process as soon as they notice that your lender is unwilling to offer you more time to clear your debt. Your lawyer advises you throughout the process of filing chapter 13 to prevent errors that could make you fail to qualify. This way, you can declare bankruptcy before your lender can acquire your home.
Declaring bankruptcy may ordinarily be your last option when dealing with your finances. Yet, circumstances can arise that cause you to consider filing chapter 13 to help you overcome overwhelming debt. This includes a situation where you're facing a possible foreclosure. In such a case, a chapter 13 bankruptcy attorney can assist you in declaring bankruptcy before your lender possesses your house.