After missing a payment or two on your mortgage, you should expect to receive a notification from your lender that they are pursuing foreclosure on your house. If this is something you are dreading, you might want to find a way to stop it from going through. But, how do you stop a foreclosure? One solution is by filing for Chapter 13 bankruptcy. Here is an explanation of how Chapter 13 helps you stop a foreclosure to save your home.
The Court Issues an Order to Lenders to Stop Collections
Filing for Chapter 13 is not something you can instantly do. It takes time and work, but once you file the documents, the court will issue an order to your lenders and creditors. The order issued states that they must stop all collection efforts, including any that relate to foreclosure. The technical term for this order is an "automatic stay." When the court issues it, you will instantly find relief from collection efforts your lenders are using as they no longer can legally pursue you in any way to collect your debts.
You Work Out a Repayment Plan With Your Lawyer and the Court
You will need to work with your lawyer and the court to come up with a plan for repaying the debts you owe, including your mortgage debt. The plan will include all the arrears on your mortgage loan and will take the current payments into consideration. The goal of the plan is to allow you time to repay debts so you are completely caught up with all payments by the end of the plan. The plan will last anywhere from 36 to 60 months.
The Lender Waits While You Work Through the Plan
During this time, your lender must wait for you to pay your arranged payments to the court for your bankruptcy case. The lender cannot pursue you at all while you are working through this plan as the automatic stay lasts until the court releases it. The court will not release it, though, until you complete the plan. If, at any time, you skip payments on your plan, the court can dismiss your case. If this happens, your lender can once again pursue foreclosure if you are still behind on your payments.
Chapter 13 bankruptcy is one of the best tools available for stopping a foreclosure from going through. If you have no other options and do not want to lose your home, call a bankruptcy lawyer today.
To learn more about using chapter 13 bankruptcy to stop foreclosure, contact a lawyer in your area.
