Foreclosure & Chapter 13 Bankruptcy
Chapter 13 bankruptcy is typically best for people who want to keep their homes – and just need some time to get caught up on mortgage payments. When your lawyer files Chapter 13 bankruptcy, it immediately stops your lender’s foreclosure actions. Then your lawyer negotiates a manageable “payment plan” for you with the lender, which is approved by the court.
As long as long as you continue to make your re-payment plan payments on time, the mortgage company can take no foreclosure or collection action against you. And you can to “get caught up” on your past due mortgage payments over time.
Foreclosure & Chapter 7 Bankruptcy
Having your bankruptcy lawyer file Chapter 7 does not permanently prevent foreclosure, but can DELAY foreclosure for 2 to 4 months.
So, if you are thinking about moving out eventually, Chapter 7 can buy you a few months of extra time. And, because you are NOT making mortgage payments during this time, you can save up money for a down payment or security deposit, and have time to find a new place to live.
The best way to prevent or delay a foreclosure is to talk to an experienced bankruptcy lawyer immediately.