Will Bankruptcy Stop Foreclosure? | Does Bankruptcy Stop Foreclosure?
As an Orange County and Los Angeles bankruptcy attorney, many people ask me, “Will bankruptcy stop foreclosure?” or “Does bankruptcy stop foreclosure?” The good news is, bankruptcy will stop foreclosure. There are two common ways a homeowner can file bankruptcy, chapter 7 and chapter 13. Foreclosure is affected differently by each, but will stop once the bankruptcy is filed.
Will Bankruptcy Stop Foreclosure? Chapter 7
Chapter 7 bankruptcy will stop foreclosure once it’s filed. It is somewhat common for a homeowner to file chapter 7 right before their scheduled foreclosure sale date (within a few days), in order to stop the foreclosure so that they can continue on with another workout option (other than foreclosure). This strategy doesn’t always work to permanently avoid foreclosure, but it is quite effective in stopping the foreclosure for a period of time, usually at least three months, while other options are explored. As mentioned, chapter 7 bankruptcy is not a permanent solution to stop foreclosure itself, but rather opens the door to other options by delaying the foreclosure process (options such as loan modification, deed in lieu of foreclosure, or short sales).
Does Bankruptcy Stop Foreclosure? Chapter 13
The alternative to chapter 7 bankruptcy to stop foreclosure which is very common among homeowners is chapter 13 bankruptcy. In chapter 13, the homeowner presents a repayment plan to the court and creditors for approval. The idea is for the homeowner to be able to catch up all the back mortgage payments, in full, over five years. In addition to catching up the mortgage payments over that time, the homeowner must also make a full mortgage payment according to the terms of their mortgage contract. Chapter 13 requires substantial, reliable and provable income to show the court. Chapter 13 bankruptcy does stop foreclosure, and if the five year repayment plan can be completed successfully, will prevent the foreclosure from happening (assuming all terms and conditions of the plan are met).
Southern California Bankruptcy Attorneys | Orange County Bankruptcy Attorney
It is difficult to explain how bankruptcy will stop foreclosure in a short overview, however, McFarlin LLP Southern California bankruptcy attorneys are available to speak to you in more detail about your foreclosure situation. Our bankruptcy lawyers represent clients in Los Angeles, Pasadena, Huntington Beach, Long Beach, Beverly Hills, Orange and throughout California. We have offices in Orange County and Los Angeles or can speak to you on the phone about your situation at no initial charge. We would be more than happy to explain the whole process and analyze your situation for you answering all your questions. Call us today at (888) 728-0044.Post Tags: Anaheim, avoid foreclosure, Bankruptcy, bankruptcy attorney, foreclosure, Los Angeles, stop foreclosure