Bankruptcy Or Foreclosure On Your Home: Which One Too Pick From?
Some people consider whether or not they should file bankruptcy or just let their mortgage lender foreclose on them? It is not usually easy and is rarely acceptable to make a decision that is black and white. A mortgage lender will file a foreclosure action when it is not paid its monthly mortgage payments. There is only on way to stop this from happening and that is pay the mortgage lender.
A mortgage loan is sort of like a car loan and if a person does not pay his car payment, he will lose the car through repossession. It will be the same for anyone who has not paid his mortgage, the bank will foreclose on the house.
Bankruptcy is a last resort legal way to get out of paying your debts if you are unable to do so. These steps put a halt to proceedings against the debtor while the person is in bankruptcy. Therefore, according to law, the mortgage lender must stop all legal action (including foreclosure). But, a mortgage loan company may apply for relief from the mandatory stay, and once it is granted, can go ahead with the previously mentioned action.
Even then to get relieve from the automatic stay a mortgage lender can go for legal action and when granted a stay can comfortably proceed with the further action. The truth is bankruptcy does not stop foreclosure nor does it allow you to keep your house with out paying the mortgage lender. Bankruptcy does not eradicate the situation; it merely slows the process down.
Although filing bankruptcy can’t stop foreclosure, it provides an individual with additional time to repay a mortgage lender or facilitates paying the lender of the mortgage. The debtor and a short time in which to come up with the needed funds, because the lender must suspend foreclosure when the debtor has filed for bankruptcy. It is the last resort for any debtor to declare bankruptcy when he is totally unable to meet his creditors commitments. Under such circumstances, he may be discharged by some unsecured debts but under mortgage, he shall be prepare to repay the debt within the given time as the debt is secured by tangible assets.
The last resort for any debtor who is unable to keep up is repayment schedule at the prevailing circumstances, is to declare insolvency or bankruptcy to avoid further consequences. Under such circumstances, the court, based on the details submitted by the creditor, may permit the debtor to repay the loan over a period of time by designated installments under chapter 13 of the bankruptcy law.
Not everyone qualifies for bankruptcy and Unfortunately if they do qualify, there are legal fees to pay. The legal costs and fees may be more than the amount needed to catch up and make current mortgage payments. If you think that bankruptcy may help you stop or avoid foreclosure, talk with a licensed lawyer. Bankruptcy is complicated enough that you need to hire a lawyer who knows what he or she is doing.
This article is general information so if you have any questions of any nature about this subject then you need to talk with a lawyer licensed in your state.