It can be terrifying to face losing your home because you are behind on your mortgage payments. Many families face homelessness because they cannot afford to catch up past due mortgage payments. If you are facing foreclosure, there could be a way to save your home. Loan modifications are one way to stop foreclosure. Filing for bankruptcy relief stops foreclosure too.
For help with foreclosure, contact Allegiant Law Group for a free consultation by calling 602-562-1000. We can review your options for stopping foreclosure and saving your home.
A Top Phoenix Foreclosure Lawyer to Help You Stop Forfeiting the Rights to Your Property
Foreclosure is the legal process of collecting mortgage debt that is not being paid. The mortgage company files a foreclosure complaint requesting court permission to sell your home to recover the debt you owe.
Once the mortgage company hires an attorney to proceed with a foreclosure, it can be difficult to stop foreclosure. To stop the proceeding, the mortgage company requires you to pay the entire past due balance and all costs for collection. Most people do not have any way of coming up with a lump sum payment to prevent foreclosure.
However, filing a Chapter 13 bankruptcy case stops the foreclosure process immediately. The automatic stay provisions of the Bankruptcy Code prohibit the mortgage company from taking any further steps to collect the debt. Even if your home is about to be sold at a foreclosure sale, the sale cannot go forward if you file a bankruptcy petition before the foreclosure sale date.
How Does Filing Chapter 13 Save My Home?
A Chapter 13 bankruptcy case is a repayment plan. Your past-due mortgage payments are included in your bankruptcy plan. You can pay a little each month to catch up your mortgage payments instead of paying one large payment. As long as you make your Chapter 13 plan payments and resume making your normal mortgage payments outside of the plan, you can keep your home.
Additionally, your Chapter 13 case also gets rid of unsecured debts that you are struggling to pay, including credit card debts, personal loans, and medical bills. By filing a Chapter 13 case, you can get rid of these debts so that you have more money each money to pay your mortgage payments. Once you complete your Chapter 13 case, your mortgage payments are current and you are debt-free except for your mortgage.
Filing Chapter 7 to Stop Foreclosure
The automatic stay provisions of the Bankruptcy Code also apply if you file Chapter 7. The filing of a Chapter 7 bankruptcy petition also stops a foreclosure proceeding. However, Chapter 7 is not a reorganization plan. You must catch up your mortgage payments in full to save your home through Chapter 7.
If you cannot afford your mortgage payments, Chapter 7 may still help you get the fresh start that you need after a financial crisis.
Chapter 7 discharges any deficiency remaining after a foreclosure sale. A deficiency judgment is the amount of money owed to the mortgage company after your home is sold. The mortgage company could pursue collection of the deficiency judgment for many years after you lose your home. Filing Chapter 7 gets rid of the deficiency judgment. It also gets rid of most unsecured debts while protecting your other property from creditors.
Contact Our Arizona Bankruptcy Attorneys for More Information
Filing for bankruptcy relief might be the best way to save your home from foreclosure. At Allegiant Law Group, we strive to find a debt relief option that gives you the best chance of recovery after a financial crisis.