Filing Bankruptcy is an effective way to avoid foreclosure. It can guarantee a foreclosure stop.
If you are facing foreclosure in Los Angeles California, filing bankruptcy is one of the ways to delay or avoid the loss of your property. In all but a very few cases, filing Chapter 7 bankruptcy will help to delay the foreclosure of your home by several months while a Chapter 13 bankruptcy will stop the sale or foreclosure of your property altogether. Filing bankruptcy to avoid foreclosure is one of the best ways to save your property and delay collection activities by your lenders and creditors until you can reorganize your finances and pay your debts.
How Declaring Bankruptcy can save your property
Filing bankruptcy automatically stops a foreclosure on your property:
- Automatic Stay:
When you file for bankruptcy, the Bankruptcy court immediately issues an order (the order for relief) requiring your lenders and creditors to cease and desist collections until further notice. This requirement is known as the ‘Automatic Stay’ and it can save your home by immediately stopping the foreclosure date process on your property as long as the bankruptcy case is still pending. Chapter 13 requires a promise and plan to pay your outstanding mortgage debt.
- Debt rescheduling:
Declaring Chapter 13 bankruptcy will allow you to pay off the missed payments on your mortgage (arrearage) over a period of up to five years. Chapter 13 requires a payment plan as well as the regular monthly mortgage payments; during the repayment period, you will be able to avoid foreclosure and catch up.
- Avoiding payments for unsecured debt
Filing chapter 7 and 13 bankruptcy allows you eliminate debts for any unsecured loans such as credit cards and medical bills. In a chapter 13, eliminating unsecured debts is delayed until the mortgage arrears are fully paid, when the payment plan is completed.
Bankruptcy is one of the best ways to save your property from foreclosure as the law protects your property while the court order is in effect. There are other ways to avoid foreclosure, such as requesting a short sale or Deed in Lieu of Foreclosure, but these methods force you to sell your property at a loss or surrender the title to your property to your lender, and you will ultimately lose your house.
If you intend to file bankruptcy, you may need the services of a qualified foreclosure attorney to help you put your case together as well as represent you in court. Your attorney will be able to evaluate your situation and advise you on the best course of action so that you can stop foreclosure on your property and have the peace of mind to make the decisions that will help you get out of debt.