As the bills pile up and you find yourself further in debt, you may find yourself facing foreclosure. Foreclosure begins after a homeowner falls behind on mortgage payments and, like other debts, filing for bankruptcy can delay the foreclosure.
Chapter 7 Bankruptcy and Foreclosure
As with every Chapter 7 bankruptcy, your creditors will receive an automatic stay for your payments. This means that creditors must cease collection activities but this does not include a mortgage lender. Chapter 7 bankruptcy cannot stop a foreclose but it can allow you to get caught up on your mortgage payments.
Chapter 13 Bankruptcy and Foreclosure
If you file for Chapter 13 bankruptcy, you may be able to avoid foreclosure altogether. You are able to sit down with your mortgage lender and figure out a payment plan. This could mean lower payments, less frequent payments, or another solution. That said, you must stick to the new payment plan.
While both forms of bankruptcy may allow you to catch up on your mortgage, Chapter 13 is the more viable way to avoid foreclosure. Do not file for any bankruptcy until you speak with a lawyer. Call The McMaster Law Firm at 864-232-1550 for reliable bankruptcy advice in Greenville.