It is possible to stop a foreclosure by filing a Chapter 13 bankruptcy. Chapter 13 allows you to repair the mortgage default prior to the lender selling your home. In California, a lender must give a borrower ample notice that they are in default and give them warning of their intention to foreclose. In California, a lender must strictly comply with a foreclosure laws prior to selling a home. If you have received a foreclosure notice, it is best to consult with a stop foreclosure attorney to discuss legal options.
A Chapter 13 WILL Stop a Foreclosure Sale
How Does Chapter 13 Stop Foreclosure? Once Chapter 13 bankruptcy has been filed by your stop foreclosure attorney, lenders are prohibited from going through with the foreclosure sale. That’s because this ‘automatic stay’ immediately prohibits creditors (your mortgage lender included) from proceeding with any collection efforts unless they obtain further court permission. What that means is you still have a good chance of saving your home.
Use Chapter 13 and Your Lawyer For Foreclosure to Gain Time to Catch Up on Missed Payments
Not only does Chapter 13 stop foreclosure sale, it also gives you time to bring your loan current and save your house. While this automatic stay is protecting you from foreclosure you can be catching up on the payments you’ve missed via a Chapter 13 repayment plan. This plan can extend as far as 5 years, giving you an affordable way out while curing your default across this period of time.
You would continue making your monthly mortgage payment to your lender. In addition, you would be making a monthly payment to a bankruptcy trustee. Amounts paid to the trustee would be to cover any delinquent mortgage payments, late fees, etc. The trustee, in turn, relays these payments to the lender. Once Chapter 13 payments have been completed under the plan, you will no longer be in default and will be able to keep your home.
Chapter 13 is a great option for anyone under the threat of California foreclosure laws. Upon filing for Chapter 13, the court will automatically issue an order known as an ‘order for relief’ that puts the ‘automatic stay’ into effect. All collection efforts must cease at that time. Any scheduled foreclosure sale must be postponed while your bankruptcy is pending.
Our foreclosure bankruptcy attorney is here to help you. We offer free consultation to those that need foreclosure help.