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Bankruptcy Vs Foreclosure
A mortgage lender will file a foreclosure action when it is not paid its monthly mortgage payments. The only way to stop a foreclosure action is to pay the mortgage lender. A mortgage loan is sort of like a car loan. If a person does not pay his car payment, he will lose the car through repossession. If a person does not pay his mortgage payment, he will lose his home through foreclosure. Bankruptcy is a legal action filed by someone who cannot pay his debts. It stops all civil proceedings against the debtor while the debtor is in bankruptcy. So, by law, a mortgage lender has to suspend all legal actions including a foreclosure action. However, a mortgage lender can file for relief from the automatic stay, and when the relief is granted, simply proceed with the foreclosure action. The bottom line is that bankruptcy does not stop foreclosure and it does not allow a debtor to keep a house without paying the mortgage lender. Bankruptcy only slows down the foreclosure process. While bankruptcy does not stop foreclosure, it can give a person time to pay a mortgage lender or make it easier for a person to pay a mortgage lender. Since bankruptcy requires a mortgage lender to suspend a foreclosure action, a debtor has a little time to raise the money to pay the lender. Also, since bankruptcy can discharge some unsecured debts, a debtor may have more money with which to pay his mortgage payments. Also, a chapter 13 bankruptcy is a court ordered payment plan and allows a debtor to pay the mortgage catch up amount over a period of time. Unfortunately, not everyone qualifies for bankruptcy. And, if they do qualify, there are legal fees to pay. The legal costs and fees may be more than the amount needed to catch up and make current mortgage payments. If you think that bankruptcy may help you stop or avoid foreclosure, talk with a licensed lawyer. Bankruptcy is so detailed that you should not try to handle it by yourself. This article is general information. If you have any questions of any nature about avoiding foreclosure, talk with a lawyer licensed in your state. This article may be republished, but the wording must not be changed and the author links must remain active. Article Directory: http://www.articledashboard.com Stop! Don't blindly chase any option to stop, avoid, or prevent foreclosure. See what works at Stop Foreclosure - Five Options You Need To Know. And click here for more insights on bankruptcy vs foreclosure. |
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