Home mortgage problems eventually lead to the loss of property one is trying to purchase to default or foreclosure. People mostly turn to bankruptcy to end their financial crisis. This also includes those who want to prevent foreclosure of their property. Bankruptcy has proved to be an effective solution against taking away of assets a number of times.
In certain cases, bankruptcy erases almost all the debts of those who seek it. Still, there is a large population of those who had to give up their property despite filing for bankruptcy. This property may include their homes or cars. Bankruptcy can help in retaining your property but there is a specific process that is required to be followed. Before you choose bankruptcy to solve your problems, you should discuss it with an expert. An attorney experienced in mortgages can provide you with the best consultation. All the information and advice available online can help an individual find another attorney who is more experienced and can advise better. It should be acknowledged here that the person filing for bankruptcy must disclose all his income and revenue from different sources.
Individuals who file for Chapter 7 or 13 can get an Order of Relief issued from the court. This order ensures that the home is not taken away from the individual. It also provides an automatic stay order that prohibits the creditors from taking hold of assets. Not only this, a court order will be required to prevent any foreclosure sales. As a result of this, a borrower may be saved from the final sale. If you are behind in your mortgage, this may help stop the starting of the foreclosure process. The process of filing for bankruptcy should be complete before the creditors try to take hold of any asset of the borrower. This is because as soon as the process begins, these attempts of creditors are ended. The court appointed bankruptcy agent also comes forward to take care of the loans on behalf of the applicant.
How the different types of bankruptcy affect your mortgage?
If bankruptcy is filed for while the mortgage is behind schedule or is about to enter the foreclosure area, the procedure may experience halts and the right bankruptcy process may not begin. Chapter 7 bankruptcy is the only choice for those who have a disposable income that is insufficient to pay off their debts. Also, in the United States, a majority of people use this procedure. Chapter 13 is for those who have a disposable income that is sufficient to pay some of their debts if not all. In order to find out the right procedure for an individual's case, there are certain tests that may help in this regard. However, these tests are not enough to help you find the right procedure. An expert's opinion is still needed to get am explanation of certain matters and make the right choice. In usual situations, these matters may take months if you opt for Chapter 7 and for Chapter 13 three to five years are needed. For people who own a business, Chapter 11 bankruptcy is also there.
Certain complications may arise in cases where bankruptcy is used to inhibit the possible foreclosure. The court appointed debt collector can file a proposal to Lift the Stay. This will lead to cessation of measures taken by creditors to seize the assets because of the debts, unpaid loans, and mortgages. All these measures may cease for a couple of months or more. It is important that the bankruptcy procedure is completed during this time period otherwise the financial institutions will continue with their proceedings after a few months. In order to prevent the sale of your assets through foreclosure, it is important that you quickly proceed with the bankruptcy agency. Through all these processes, a person who files for bankruptcy should make sure that he gets to keep the house after the completion of the bankruptcy process.
How does bankruptcy solve the mortgage problem?
A homeowner may solve his mortgage problems as soon as he finds a solution in the form of a Chapter bankruptcy process. The first step in this method is the stopgap measure. This step prevents the seizure of any property and the threatening messages or phone calls for payments from the creditors. Soon after the beginning of the bankruptcy procedure, the borrower should start devising a way to pay off the remaining mortgage balance. It is important that the homeowner works closely with the bankruptcy agency because he has only a few months before he must transfer the money to the bank dealing with the mortgage or the creditor.
A payment plan can be devised using the Chapter 13 bankruptcy that also creates a method to prevent the foreclosure of any assets of the homeowner. If these assets are a part of the estate of the applicant of bankruptcy, Chapter 7 holds the power to nullify all the debts that the applicant has with the mortgage company. The procedure may require the need for a new deal but all of the previous debts are either eliminated completely or downsized for the applicant, hence, creating an opportunity for the person to start his journey towards financial recovery with lesser debts and an explicit conscious.
Is it important to get Legal Support through Bankruptcy for Mortgage Problems?
If you hire an attorney experienced in bankruptcy problems, he or she can assist you in situations where mortgage problems can lead to foreclosure. He may explain the various types of bankruptcy you can file for. Depending on your situation, you can get to know the best possible bankruptcy chapter for your case. Also if there are other solutions available to your problem, an experienced attorney may suggest these. However, the primary focus of a bankruptcy attorney should be on the rights of the homeowner. Whatever procedure or chapter of bankruptcy is chosen, he or she should always ensure that the rights of the homeowner do not get violated.
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