Bankruptcy for home owners can affect the foreclosure process. Bankruptcy and foreclosure are regulated by different laws. If you are facing bankruptcy and/or foreclosure, you should work with an experienced attorney that understands the bankruptcy process and real estate law. This will protect you from predatory practices from lenders. You will also be less likely to end up in a more difficult situation. An attorney will fully understand the real estate law that applies to your particular situation. Real estate law varies significantly from state to state, so it’s important to work with someone local.
Many homeowners declare bankruptcy to stave off the foreclosure process. If a home is scheduled for a foreclosure, bankruptcy law requires the sale to be postponed while the bankruptcy is pending. This can last a few months. This postponement is not set in stone. Depending on real estate laws in your state, lenders may be able to have the postponement lifted. An attorney can advise you on whether filing for bankruptcy is in your best interest when it comes to home foreclosure.
Depending on the type of bankruptcy you declare, you may be able to keep your home. If you file Chapter 13 bankruptcy, you will agree to a repayment plan over a length of time. However, it’s important that you are able to meet the terms of the repayment agreement. You’ll need enough income in order to make payments and avoid a foreclosure situation.
If you have second or third mortgages on your property, you may be able to eliminate these payments. An attorney who understands real estate law and bankruptcy regulations can advise you on whether this is the best course of action for you. It depends on the current value of your home and the balance of the second and third mortgages. In some cases, the additional mortgages are waived but this does not to apply to all situations.
Bankruptcy may not always help you keep your home. However, it can buy you time to work out an alternate plan with your lender. Sometimes, lenders are willing to adjust the mortgage payment plan to help people keep their homes. You should work with an attorney to ensure that this agreement is fair and equitable.