Filing Bankruptcy Can Stop Foreclosure and May Save Your Home
Immediately upon filing either a Chapter 7 or Chapter 13 bankruptcy, the automatic stay is entered by the court. The automatic stay immediately stops foreclosure and all other debt collection activities. However, in Chapter 7 cases, the automatic stay is only a temporary remedy. If you cannot make up the back payments, the bank will eventually obtain permission from the bankruptcy court to resume the foreclosure. For many people, this is enough. It gives them time to plan, find new living accommodations, or attempt a loan modification.
If you can’t bring your mortgage payments current right away, but you can over time, a Chapter 13 petition is a better option and can save your home. If you can make up the arrearage over 36 to 60 months, the bankruptcy code permits you to cure your arrears and maintain your mortgage in current status, even if the bank doesn’t agree.
In fact, in some cases, bankruptcy can do more than save your house. It can eliminate second mortgages, reduce your permanent monthly payment to an affordable level, and restore you to a favorable equity position. In Chapter 13, you can strip off and discharge a second mortgage completely if the home is worth less than the amount secured. Click here to learn more about “lien stripping.”
Bankruptcy truly can save your home in the right circumstances.
Use the handy form below to contact an experienced Massachusetts bankruptcy lawyer for a free initial consultation to see if bankruptcy can save your home.